Global Agenda Councils Creating New Models Innovative Public-Private Partnerships for Inclusive Development in Latin America

Authored by the Members of the World Economic Forum Global Agenda Council on Latin America

April 2014 Published by World Economic Forum, Geneva, Switzerland, 2014

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, or otherwise without the prior permission of the World Economic Forum. The views expressed in this publication are those of selected members of the Global Agenda Council on Climate Change and do not necessarily reflect the views of all the members of the Council or of the World Economic Forum.

World Economic Forum 91-93 route de la Capite CH-1223 Cologny/Geneva Switzerland Tel.: +41 (0) 22 869 1212 Fax: +41 (0) 22 786 2744 [email protected] www.weforum.org Contents

4 Foreword 5 Introduction 8 Part I 8 A. Latin America Today 10 B. Innovative Public-Private Partnerships: Concepts and Emerging Trends 15 C. Partnership Enablers: Tools, Practices and Opportunities for Empowering iPPPs

18 Part II : Case Studies 18 Case 1. University for All (ProUni) 23 Case 2. Concession Schools in Colombia 26 Case 3. Empresarios por la Educación (ExE) 28 Case 4. Partnerships for Progress and Inclusion, Strengthening Technical and Vocational Education in Colombia 31 Case 5. Promotion of Productive Development through the Inclusion of Women in Quality Employment in Central America 34 Case 6. Global University Engagement 37 Case 7. Digital Health Project of the Federation of Internal Medicine (FEMI) 41 Case 8. Affordable Earthquake-resistant Housing 44 Case 9. Agroforestry in the Amazon Rainforest 46 Case 10. The Olmos Project 49 Case 11. Multistakeholder Partnerships for the Conservation of the Amazon Biome 52 Case 12. Inclusion of Carbon Footprint Measurement in Export Development Strategies 56 Case 13. Enhancing the Production and Dissemination of Weather-related Indicators to Adapt Agricultural Production to Climate Change by Means of ICTs 59 Case 14. Innovation in Public Services in Brazil (“Project Juntos”) 62 Case 15. Regional Broadband Dialogue 66 Part III 66 A. Key Success Factors 67 B. Policy Recommendations 68 C. Conclusions

70 Acknowledgements 70 Members of the Global Agenda Council on Latin America 72 Appendices 72 1. Methodology and Case Selection Criteria 73 2. Authors and Affiliations 74 Endnotes

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 3 Foreword

The steady economic growth the notion that in an ever-connected Marisol Argueta de Barillas experienced by Latin America over the world, no actor can deliver maximum Senior Director, Head of Latin past decade has allowed countries in the social benefit alone. The Council believes America, World Economic Forum region to step up efforts to achieve that there are additional benefits to Forum Lead, Global Agenda Council on Latin America development objectives and to reinforce sharing practices described here as a way state-run public programmes aiming to of underpinning confidence in well- Fernando J. Gómez bring about much-needed social structured partnerships, as inspiration for Associate Director, Latin America, transformations. Nevertheless, Latin other countries in the region and beyond World Economic Forum American economies still face the to replicate and build upon these models, Council Manager, Global Agenda Council on Latin America challenge of guaranteeing sustainable, and as a window into the ingenuity of the inclusive, good-quality growth and region. With this report, the Council has development to satisfy the demands of a made a valuable contribution to the better-informed and increasingly well- definition of the regional agenda, educated population. To respond to these anticipating important trends and issues challenges, institutions are now redefining in the region. It reflects the diversity of their “default” roles and, perhaps more Council Members’ experiences and importantly, their modes of operation. views, and their understanding of local interests. Public-private partnerships have therefore emerged in the social and sustainable The World Economic Forum is proud to development arena as efficient models for support the Global Agenda Council’s the provision of public services and social commitment to the improvement of Latin entitlements to the Latin American America. We are grateful to the authors of citizenry. The region is now accumulating these case studies, to the Members of the valuable experience, as shown by the Global Agenda Council and their many well-functioning alliances among organizations, and to the teams at the governments, the private sector, civil Forum who made this report possible. We society and other stakeholder groups that would like to extend special thanks to make the most of capital investments, Enrique García Rodríguez, Chair of the especially in the areas of social and Council, and to Alicia Bárcena Ibarra, human capital development. Vice-Chair of the Council. Their leadership and the commitment of their teams are an In this report, the members of the Global inspiration to us. Agenda Council on Latin America have chosen to illustrate, through a series of brief case studies, the creativity and commitment displayed throughout the region in the design and execution of innovative public-private partnerships in areas such as education, health and environmental sustainability. These studies highlight the benefits of capitalizing on the strengths of the different sectors in question, and support

4 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Introduction

The ongoing paradigm shifts in the world change, the loss of biodiversity, financial divided in terms of quality between private economy, the emergence of new global stability, and the need for identifying new and public services, thus perpetuating concerns over recent decades, and the patterns of production and consumption, intergenerational poverty and exclusion. magnitude of the economic and financial call for new solutions at the global, In spite of the positive achievements of the crisis begun in 2008-2009 have further regional and national levels. past decade, the region is fraught with challenged traditional views of the role of Over the course of the past decade, Latin structural gaps, the most pressing of the state, the private sector, civil society America also experienced significant which include its high levels of inequality, and community organizations as well as changes in its societies, growth trends segmented access to education and traditional models for cooperation and development paths. The dynamic health, urban and territorial segregation, between them. In industrialized countries, growth cycle from 2002 to 2012, driven by low levels of productivity and investment, the economic and financial crisis and the a favourable external climate, enabled and limited productive and technological subsequent eurozone debt crisis have led significant progress in the social sphere, innovation capacities. Following a to one of the worst economic depressions chiefly in terms of reducing poverty and, predicted economic slowdown, new in recent history, placing increasing to a lesser extent, extreme poverty and expectations from the region’s people and pressure on public finances and job inequality. It was also sustained by a traditional social burdens are therefore markets and further questioning the combination of sound economic and likely to further test the resilience of its sustainability of traditional welfare models. social policy-making from governments societies, the overall sustainability of the By contrast, between 2008 and 2012, the and accompanied by improvements in the current growth models and the ability of countries of the global South – particularly labour market and real wages which public and private actors to address these China and the other BRICs (Brazil, Russia, enabled greater resilience to external issues. New constraints created by the India and China, taken together) and rapidly shocks. The emergence of a “new middle changing global context, such as a growing emerging economies – emerged class”, albeit very different from that of reduced fiscal space, limited access to as key drivers of global growth. These industrialized countries and still vulnerable financial flows and to traditional trends, together with the dynamism of to falling back into poverty, has enabled instruments of development finance or South-South trade and cooperation, have significant progress in terms of providing deteriorating terms of trade and levels of contributed to a relative shift in traditional households with access to a more international reserves, are likely to place balances of power and centres of wealth. diversified basket of consumer goods. more pressure on governments and call for innovative solutions. The recent launch of mega-regional trade However, it has also given rise to new negotiations is a sign that industrialized demands and higher expectations New efforts and approaches must countries have quickly reacted to this regarding the provision of quality goods therefore be urgently devised to take development and that regionally and services, which have fallen short in stock of the changes that have taken integrated blocs will be increasingly areas such as education, health and place among all actors of society. significant on the global stage in the public transportation and therefore pose Changes at the global and regional level coming years. In parallel, the social unrest new challenges to public and private have renewed debate on and interest in in various parts of the world and the decision-makers. On the one hand, the the role of the state and policy-making, in growing expectations of citizens for notion that the state has enabled greater particular whether to pursue state-led greater equality within a rights-based equality and promoted a rights-based economic policy or enhance collaboration framework, inclusive growth and better approach has become widely recognized between the state and private actors. ways of providing quality public goods by the region’s societies and citizens. On Societies have called for new forms of and services have stressed the need for the other, in spite of the different leadership, sufficient institutional capacity, new models of governance and growth. development models currently in use in the right forms of governance and creative Finally, global concerns including climate the region, its societies are still clearly thinking to address these challenges.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 5 Civil society and local communities have roads, or large-scale research and Enrique García Rodríguez become increasingly well-organized and development (R&D) projects means that President and Chief Executive Officer, Development connected at the global, national and local success is contingent on collaboration Bank of Latin America (CAF) levels. They have been able to raise the between public and private stakeholders. Chair, Global Agenda Council on Latin America, World Economic Forum voice of citizenship and have progressively In various innovative success stories, the developed into significant and reliable state has been a powerful driver and risk Alicia Bárcena Ibarra 3 Executive Secretary, United Nations Economic stakeholders. Their contribution to policy taker at the early stages of development. Commission for Latin America and the Caribbean analysis and debates is increasingly Thanks to the social dynamism and (ECLAC) relevant, and they have become key innovation of Latin America, creative PPPs Vice-Chair, Global Agenda Council on Latin America, actors in helping devise innovative have emerged in recent years and provide World Economic Forum approaches and implement specific powerful examples of how collaborative development initiatives, often hand-in- solutions have developed between private hand with the academic sector. and public actors and can usefully address structural challenges throughout These new concerns have also raised the the region. interest and understanding of the business sector, initially through corporate This report provides a selection of social responsibility but increasingly successful case studies focusing on through the greater understanding of the innovative public-private partnerships business impact of and opportunities (iPPPs) that have responded to critical created by such issues as social and development challenges in the areas of sustainable development, climate change social, human and sustainable or digital connectivity. Some companies development. The case studies, prepared and sectors have already started to by a multi-disciplinary team from, and rethink their business models by taking supervised by, the Global Agenda Council account of such issues and reaching on Latin America of the World Economic towards the most vulnerable sectors of Forum, cover a broad set of thematic society – the “bottom of the pyramid” – or areas including education, health, turning social and global development sustainable development, climate change, issues into business opportunities. access to and use of information and communication technologies, the New instruments such as microcredit and efficiency of public administration, new approaches such as social business, post-disaster prevention and social innovation or solidarity economy reconstruction, and gender equality. have therefore quickly gained momentum. New and younger players from academia, Each case highlights the ways in which business and civil society – such as social innovative collaboration between entrepreneurs – have become dynamic governments and private actors has actors, providing innovations that change improved the quality of public goods and the way the market and civil society services or contributed to sustainable address some traditional challenges. development. The range of case studies Such actors rely heavily on new varies from the local to the regional and technologies and mobility and aim to turn national level. Some are transnational development issues into opportunities for initiatives where public and private actors business and society. In tackling many have not only overcome mistrust of their social and sustainable development traditional “separate” approaches, but challenges, the state is therefore called on have also been able to enhance the to generate new social covenants in which overall delivery and quality of goods and long-term strategies and partnerships services that were traditionally delivered with these actors can give rise to “win- by a single actor, in either the private or win” opportunities that help build the public sector. These cases only inclusive, more equal societies. represent one set of examples and areas in which innovative approaches are Successful initiatives of this type shed currently taking place in the region; there light on the opportunity provided by are certainly many more. Based on these public-private partnerships (PPPs) at the different experiences, the report seeks to global, regional, national and local levels. identify key success factors and policy PPPs have traditionally been seen as tools recommendations that, we hope, will to provide powerful leverage to carry out provide ideas for the design and large projects, chiefly in the area of implementation of more innovative infrastructure development1 but also in public-private partnerships and policies to encouraging long-term productive and address the growing concerns of the export development strategies.2 In the region’s societies and beyond. case of infrastructure, the long-term nature of the investments and the risks involved, particularly in energy exploration and generation, public transportation and

6 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 7 A. Latin Part I America Today

… The good news Over the past decade, Latin America has benefited from a remarkable period of economic expansion, accompanied by significant progress in poverty reduction and other social progress. Between 2003 and 2012, the region grew at an average annual rate of 3.8%, in spite of the contraction attributable to the international financial crisis (2008-2009). This expansion was primarily driven by favourable international conditions and the rapid growth of world trade and commodity prices, resulting in positive terms of trade for the region, particularly for South America. Over the same period, most countries in the region engaged in more cautious macroeconomic management, progressively making debt levels and fiscal and external accounts more sustainable. In parallel, governments have also maintained steady growth in social public spending, a trend that was not halted by the effects of the 2008-2009 crisis. This underlines the stronger economic and social resilience of the countries in the region as, unlike in previous crises, social spending was not used as a buffer to cut budgets.

8 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Figure I.1 : Latin America and the Caribbean: GDP Growth, 2004-2013 Most countries in the region have also (Percentages) benefited from favourable labour market conditions that have led to a reduction in 7,0 informality, an increase in “quality” job creation and a rise in average real wages. 6,0 5,4 This combination of factors, along with the 5,0 implementation of active and innovative

4,0 social policies – particularly conditional 3,4 cash transfers (CCT), which were 3,0 progressively replicated throughout the region and beyond in the 2000s – have 2,0 enabled a reduction in income inequality 1,0 for the first time in decades.

0,0 These developments have also enabled 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 the emergence of a “new middle class” in - 1,0 many countries of the region, since a - 2,0 significant share of the population has been lifted out of poverty. While this Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures. population now has access to a more diversified basket of consumer goods and services, new demands have been made Figure I.2 : Latin America and the Caribbean: Poverty and Indigence, 1980-2013 for access to other goods and services of (Percentages of the population) a higher quality, particularly in sectors

60 pertaining to social and urban development, such as education, health,

50 public transportation and citizen security. Part of this new middle class is quite 48.4

Percentages vulnerable to falling back into poverty, and 40 43.8 43.9 40.5 the social unrest in these countries may

30 33.5 well be related to the rising cost of public 29.6 services, which this social group fears 28.2 27.9 could threaten its new status. This new 20 Latin American middle class is therefore different from the one traditionally 10 depicted in more developed countries. This stresses the importance of finding 0 1980 1990 1999 2002 2008 2011 2012 2013 new ways to provide quality public goods and services to help consolidate this Indigent Non-indigent poor emerging phenomenon. Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures. … But caution! The international context is changing, with Figure I.3 : Latin America and the Caribbean (21 Countries): Social Public negative ramifications for the region as a Spending as a Share of Total Public Spending, and Total Public Spending as a result of decreasing external demand, a Share of GDP, 1991-1993 to 2010-2011 moderation in commodity prices, and the (Percentages of GDP and total public spending) uncertainty generated by tightened monetary and financial conditions across 40 100 the globe. The countries that have driven 35 90 global growth over recent years, 29.2 29.0 especially China, are now entering a 30 25.9 26.0 26.2 80 phase of slower growth. The probability of 25.0 24.7 25,2 24,5 24.4 25 lower growth rates in the medium term

Percentage of GDP 70 65.3 66.2 65.9 jeopardizes the progress that has been 20 63.4 64.7 60.5 60 made in the fight against poverty and 58.2 57.0 15 53.7 inequality in the region, and slack growth

50.0 50 Percentage of public spending could be more damaging for South 10 American countries, which are more 40 5 dependent on commodity exports.

0 30 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Total public spending as a percentage of GDP Social spending as a percentage of GDP Social spending as a percentage of total public spending

Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 9 Such a prospect makes it all the more In this context, it is important to note the Then… how to respond? urgent to carry out structural reforms to fundamental differences between private To confront these challenges, Latin address the most serious gaps: the worst and public resources, which obey a America needs to pursue a greater income distribution in the world, different logic and respond to different degree of economic diversification, persistently high levels of informality and incentives. ODA is granted and provided supported by policies promoting of structural heterogeneity, vulnerability to according to set criteria and development innovation and strengthening productive external shocks, unequal access to needs, and is contingent on dialogue links. This requires difficult reforms to education and social protection and between donor and recipient. Private boost productivity, improve education and shortcomings in terms of innovation and flows, on the other hand, respond to strengthen government capacity to productivity. The limited improvements market incentives and are mostly driven address social needs. In the social made in productivity in most of Latin by profit motives; this in turn requires sphere, the countries of the region must America are partially explained by rigid public policies to create a positive devise and put into place a second labour market regulations, which have investment environment and set the generation of policies that go beyond fostered a large informal sector with a vast appropriate incentives. A key challenge is conditional cash transfers, as social array of small and unproductive firms and therefore how to blend private and public issues and progress cannot be very few dynamic large and medium- resources to generate innovative ways to addressed by social policies alone. The sized firms. One of the biggest challenges combine the different funding methods following is required: in the region, then, is how to promote and achieve the required leverage to dynamic entrepreneurship in start-ups to maximize the impact of development -- Sounder macroeconomic create small and medium-sized finance. management, to limit social setbacks enterprises with high growth potential. To during economic crisis and favour Latin America is also the most urbanized address these challenges, Latin America growth with job creation region of the developing world, with nearly needs to pursue a greater degree of 80% of its population living in urban areas. -- Lower inflation rates at the national economic diversification, supported by One in three Latin American people lives level, to temper vulnerability to volatile policies promoting – not forcing – in cities with upwards of a million international prices of primary goods innovation and strengthening productive inhabitants, which take up a large share of and food products linkages. This requires difficult reforms to financial, technological and educational boost productivity, improve education and -- More balanced public finances, to resources. The sustainability of urban strengthen government capacity with a allow building fiscal space to sustain development remains a challenge in terms view to addressing social needs. Cross- public spending and consolidate social of housing, transport and commuting, cutting global challenges such as energy policies pollution, citizen security and so on. independence, climate change, loss of -- Investment and savings, to boost fixed biodiversity, sustainable growth, and Finally, global challenges such as climate capital formation, infrastructure and access to global financing also need to be change, environmental sustainability and innovation addressed. the need for more sustainable patterns of production and consumption also need to -- A sustained period of high economic In terms of access to financial flows, be addressed. Latin America’s significant growth, to support the creation of efforts need to be made and new natural heritage and abundant natural formal jobs and the rise of labour approaches must be devised to take resources6 need to be managed in an incomes, keeping a focus on stock of the significant changes that have environmentally sustainable manner. As employment as the master key for taken place in respect of the actors, climate change intensifies, the equality instruments and mechanisms in the consequences are likely to become more development finance sector. On the one serious and to threaten the social, hand, the traditional reliance of Latin economic and environmental America and the Caribbean on official development of Latin America and the development assistance (ODA) flows as a Caribbean. The possible consequences source of development funding has been include decreases in agricultural decreasing in recent years,4 thus raising productivity in some areas; a significant the importance of private flows. In addition deterioration in the quality, quantity and to the growing importance of private availability of fresh water; damage to flows, new actors have appeared in coastal areas; more widespread international cooperation: emerging donor bleaching of coral and the death of coral countries other than the members of the reefs; increased economic damage from Organisation for Economic Co-operation intense weather events; and the extensive and Development’s Development loss of biodiversity. Assistance Committee (DAC) and private donors such as NGOs and philanthropic institutions.5 As Prada (2012) has stated, private flows currently account for close to 90% of financial flows to countries in Latin America and the Caribbean, whereas official flows comprise slightly above 10%.

10 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America and requires overcoming ideological, addressed. This collaboration is reflected B. Innovative cultural and organizational barriers, they in the design and consolidation of may ultimately provide a qualitative leap in institutional arrangements to ensure the Public-Private terms of processes and outcomes in sustainability of these new solutions in contributing to social and sustainable both the design and the delivery of public Partnerships: development. services. In many developing countries with weak institutions and low levels of Public-private partnerships are widely Concepts and social trust, public and private agencies known to be powerful tools in carrying out encounter significant economic, legal, major projects chiefly in the area of Emerging Trends political and even social obstacles in infrastructure,8 but are also of great use in building these alliances. developing export strategies.9 Activities such as energy exploration and The underlying logic of developing iPPPs This report argues that addressing the generation, public transportation and is that the most pressing development traditional social gaps and emerging roads, or even large-scale research or issues should be analysed jointly – rather development challenges in Latin America scientific projects naturally bring together than separately – by governments, public increasingly means that public and private public and private stakeholders. Various institutions and businesses and actors must seek greater efficiency, modern innovation success stories addressed using a complementary quality and sustainability in the delivery of currently led by private interests were approach and long-term common vision. goods and services traditionally provided originally kick-started by the state, which These actors are increasingly facing new by the public sector. This line of reasoning played the role of driver, investor and risk limitations to their capacity to act alone or is particularly relevant in the social and taker at the early stages of development.10 in traditional ways. In the case of the state, sustainable development spheres, where Public-private alliances are vital for the these include fiscal and public budget there have been sharp dividing lines formulation and implementation of constraints, limited fiscal space, an between the different sectors of the strategies in an era of globalization and unfavourable perception from society or population in terms of the quality of and growing international competition.. public mistrust owing to a lack of efficiency, excessive bureaucracy or even access to education, health, security, In the social and sustainable development corruption. Similarly, the private sector public infrastructure and transportation, spheres, partnerships between public may suffer from the perception that its as well as differing experiences in respect and private actors are less common but for-profit rationale is incompatible with the of gender equality, climate change and are becoming more widespread, public interest and social or sustainable sustainable development. In this report, suggesting that a new paradigm for development. In the absence of adequate we wish to highlight innovative public- collaboration, action and impact is rapidly regulation, self-regulation may curtail private partnerships (iPPPs) in which the emerging. The issues to be addressed in competition and deepen inequalities state, private firms and civil society these areas range from equal access to through the “mercantilization” of services organizations have identified opportunities quality public goods and services – in education and health and otherwise for the design and implementation of new particularly in education and health – 7 have negative external effects in the social forms of collaboration. combating income inequality, improving and environmental spheres. Finally, civil access to formal jobs and reducing Introducing iPPPs implies rethinking the society actors may suffer from informality, tackling social vulnerability of traditional role of the state in the drawing- perceptions that they lack proper certain sectors (in particular women, up, financing and implementation of management or accountability. covenants, policies and programmes. indigenous populations and children), However, rather than removing the state gender equality, housing, and sustainable Such divisions and prejudice can be as an actor, establishing an iPPP requires patterns of production and consumption. progressively overcome, and there are a strengthening its capacities. In this Developing iPPPs and meaningful models growing number of positive factors chapter, iPPPs are defined as initiatives in to better bridge the significant divide identifying the opportunity to enhance which the state not only retains the key between the quality of public and private dialogue, foster collaborative approaches roles of supervising, providing incentives service provision is key to societal and identify innovative solutions in terms and regulatory frameworks for the advancement. of design and implementation of their interventions between governments, provision of quality goods and services, PPPs are defined as an innovative private sector and civil society. Below is a but also identifies new opportunities and organizational and financial solution that quick overview of the recent governance mechanisms to do so jointly emerges from cooperation between the developments affecting these actors and with the private sector with a view to public and the private sector with a view practices as well as details on how new optimizing outcomes, impact and to supplementing the government’s public actors have emerged, providing fertile sustainability. The traditional role of the response to growing social needs in a ground for the development of iPPPs. private sector has also significantly specific sector, country or region. PPPs changed in terms of its understanding of usually – although not exclusively – take and potential contribution to social and the form of legally binding contracts that sustainable development issues, although define how resources, risks, it maintains its business focus and responsibilities and profits (if any) will be for-profit orientation. Finally, other actors, shared between the public and the private such as NGOs, communities and sector. PPPs usually require strong academic institutions, also necessarily fit collaboration between both sectors into this equation by contributing their based on the expertise and knowledge own comparative advantage, voice and that each actor has regarding potential positioning. Although establishing iPPPs solutions to the social needs to be among these actors is no simple matter

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 11 1. The state 2. The private sector An increasing number of corporate foundations also stress the importance of In the current context of a shifting In the case of the private sector, going beyond welfarism and focusing on paradigm, the role of the state remains businesses have become more interested community development by identifying vital in designing, fostering and in pushing for greater involvement in and supporting social development and implementing social covenants, regulatory solving social problems both in social innovation projects, mostly at the frameworks, incentives, policies and industrialized and (increasingly) in sub-national, local and community levels. innovative partnerships with the private emerging countries, thereby going For example, the members of Red sector and civil society actors to beyond traditional corporate social eAmerica,14 a network of 76 Latin encourage progress in society, the responsibility to touch on issues such as American corporate foundations, runs the economy and the productive sector within poverty, inequality, fair trade or the “transformadores” contest to identify and a rights-based approach. To forge a new environment, which are progressively disseminate innovative community-level social contract facilitating the exercise of becoming part of their corporate values. practices aimed at reducing poverty and citizenship in all its dimensions, the state More importantly, the business case inequality. The Brazil-based Lemann must encourage the transformational through which the private sector seeks to Foundation15 develops innovative agenda through a combination of position itself among more vulnerable initiatives to provide increased access to coherent economic and productive sectors of society by providing them with education, from primary to university development policies and provide for an goods and services and to address levels, including the “Science without inclusive social safety net. It must also issues of environmental sustainability is borders” project aimed at fostering work towards universal employment with quickly gaining acceptance as a new research, technological development and full rights, universal social protection and source of value creation. innovation by increasing tertiary outbound capacity building. An essential More recently, some business sectors mobility. precondition of integrated development is have therefore stressed the importance of a politically legitimized state capable of rethinking their business models by taking 4. Civil society, NGOs and local achieving that goal in the long term and of such issues into consideration, reaching communities engaging and coordinating economic and towards more vulnerable sectors of social agents. This entails taking initial Over the past decade, NGOs and society and the “bottom of the pyramid”11 risks related to funding or kick-starting organized local communities from civil (BOP), which had been traditionally innovative and successful initiatives to be society have become very significant underserved, thus turning social and run by the private sector. stakeholders in the analysis and debate of global development issues into business issues related to sustainable Additionally, the characteristics and opportunities. As Prahalad (2011) and development, the environment and the expectations of “the new middle class” Yunus (2013) have stated, developing rights of the most vulnerable sectors of and the need for innovative mechanisms, innovative approaches to reach the BOP society. These actors have progressively greater sustainability and new sources of and reshaping business models towards become more informed, organized and financing for the provision of quality goods sustainable social impacts can be relevant in raising public interest and in and services in the social and facilitated by building and generating formulating and implementing concrete environmental spheres increasingly “ecosystems” which include large initiatives addressing economic, social require the state to devise new corporations, SMEs, micro- and cultural rights-based issues in sectors generations of policies and tools at all entrepreneurs, NGOs and the public as diverse as education, health, food levels of government: national, regional, sector as collaborators. security, the rights of indigenous local and community. The state remains populations and young people, access to the key actor in forging social covenants 3. Corporate and private philanthropic water, and the impact of extractive with other relevant social stakeholders foundations industries. They have benefited from with a view to achieving greater equality Corporate and philanthropic foundations improved institutions and the inclusion of and intergenerational sustainability, chiefly help bridge the gap between the their concerns on the public agenda, and in the areas of productivity and corporate world and the fight against in some cases have developed solid investment, employment and fiscal policy. poverty at the national or community partnerships with academia and donor Such a vision requires the ability to levels. Today, financial flows from private institutions, thus reflecting the growing integrate these actors into broader philanthropy to the developing world awareness of citizens and societies as a public-private policy frameworks in, outweigh the monetary contributions of all whole of their rights and responsibilities among others, the macroeconomic, governments combined.12 Some global regarding sustainable development. industrial, science and innovation, social private foundations, such as the Bill and and environmental spheres. It also Moreover, as Rey de Marulanda has Melinda Gates Foundation, have become requires more closely monitoring stated (ECLAC, 2010), the Latin American global players, addressing key social innovative mechanisms established by and Caribbean region is currently challenges, particularly with regard to public authorities, private institutions, civil witnessing an “explosion of creativity and health and education. In Latin America, society and communities, or a social innovation” from civil society, whose the Kellogg Foundation, the Ford combination thereof, and providing a main driving forces are NGOs and local Foundation and Ashoka traditionally framework for their evaluation to assess communities. NGOs have become key support pioneering projects and research the potential for scaling and replicating the actors in implementing social in identifying innovative initiatives and most successful mechanisms. programmes and initiatives. In the same conceptual frameworks.13 vein, local communities, such as indigenous peoples, rural populations and other vulnerable groups have become relevant social and political actors, participating directly in the formulation

12 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America and provision of innovative and integrated Avina’s strategies are aimed at great emphasis on the use of results- approaches to their local and territorial developing, promoting and enhancing based management tools for measuring development. Under this logic, collaborative processes that involve a the relevance and efficiency of the governments may often find it more variety of participants from different processes, assessing the impact of the efficient to partner with or rely on NGOs sectors and multiple points of view. It initiatives on public policy agendas and and communities in implementing some maintains a balanced critical mass of civil devising exit strategies to ensure of their social programmes and initiatives, society, private sector and government sustainability among stakeholders. Two because they benefit from greater actors that share a vision for the future, recent public-private initiatives – on legitimacy, have particular skills or are adopt innovative social methodologies post-earthquake reconstruction in Chile’s more likely to deliver the expected results and converge in shared agendas of action central-south region and on the and outcomes. Such partnerships can to influence joint decision-making for the transnational approach to deforestation in prove to be more productive and more better and to drive social change. Avina the Amazon biome – offer examples of efficient than initiatives that public adds value to collaborative processes in specific work carried out by Avina authorities implement independently. order to pave the way for these social Foundation. Interestingly, many of the case studies changes – actual improvements in Source: AVINA, for further information: http://www.avina.net clearly suggest that organized people’s quality of life or in the communities have been empowered and environment through political, institutional, are demanding to take the lead in both the technological, scientific or cultural design and implementation of transformations – that will lead to systemic programmes and potential iPPPs. changes in communities, cities and 5. Universities, think tanks and countries, which will in turn have an research centres impact on sustainable development. It Universities, think tanks and research does so by contributing contextual centres play an important role in the intelligence drawn from unique promotion and development of iPPPs. By approaches and innovative knowledge, analysing iPPPs in progress, these fostering the convergence of stakeholder institutions identify causes and factors interests, visions and goals. It helps that contribute to the success or failure of coordinate the efforts of diverse actors by partnerships between governments and building trust and creating productive links the private sector, and assist in the that leverage their joint work, and helps its improvement of these relationships. Fundación Avina: Example partners introduce and advance a Furthermore, academia and research of an Integrated common vision and shared agendas of centres provide, through their case action in different areas. studies, a holistic overview of PPPs Vision of Development Based on a Systemic changes are changes that worldwide, validating models applied in PPP in Latin America effectively challenge the status quo, are specific countries that could be replicated resilient and can scale up impact, thus elsewhere. In other words, they provide Fundación Avina was established in 1994 affecting structures and the prevailing the private and public sectors with a by Swiss entrepreneur Stephen conditions, beyond isolated events or benchmark for best practices in PPPs. Schmidheiny with the initial goal of developments. They are necessary to strengthening initiatives from social and Their participation extends beyond merely achieve sustainable development, which researching and documenting to acting as business leaders in Latin America to is by definition capable of being sustained promote sustainable development in the a partner in iPPPs. Foreign and local, in the long term. Such changes are private and public universities play an region. As a dynamic organization that is complex, reflecting an infinite number of constantly learning and changing with the important role today in the improvement of variables that go beyond the linear logic of education in Latin America through their times, Avina now looks outside the region cause and effect and are cross-cutting in to identify opportunities to impact global partnership with the different governments nature, because they are not limited to any and by facilitating the access of low- sustainable development from Latin one sector or area. Two types of changes America, by creating favourable income students and vulnerable are key to the region: increasing the value populations to learning institutions. PPPs conditions for diverse actors to join forces of public goods, that is, of what belongs in contributing to the common good. involving universities and research centres to all citizens, because the more public have been strengthening the social These opportunities are selected on the goods there are, the less inequality there basis of their relevance for sustainable infrastructure by improving the technical will be; and the transition towards a new skills of the labour force. development, their potential for regional economy that preserves natural wealth and global scalability, the existence of and contributes to social progress. An interesting coordinated effort is the gaps in collaboration between the various Social Enterprise Knowledge Network stakeholders – as by reducing this gap, Avina’s efforts are focused on a portfolio (SEKN), a network for collaboration the collaborative processes can be of regional and global opportunities among 10 of the most prestigious strengthened – and the presence of developed together with its partners and business schools in Iberoamerica. Its tipping points. That is, conditions that adapted to the specific conditions of the mission is to push back the frontiers of ensure that specific actions will have an 21 countries in which it operates. The knowledge and practice of social projects impact on the processes of areas of action currently covered include through joint research, shared learning transformation. access to water, the Amazon biome and case-centred teaching, as well as strategy, energy, the extractive industries, capacity building for management training inclusive recycling, migration, public institutions serving their communities. institutions, sustainable cities and the South American Chaco. Avina places

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 13 6. Regional and multilateral institutions and linked to the priority needs of levels. More recently, the Global developing countries in a more systematic Partnership for Effective Development a. The United Nations manner. Lastly, robust accountability Co-operation,19 promoted by the The United Nations is a global and mechanisms at the global, regional and Governments of the United Kingdom, regional facilitator of neutral dialogue on national levels will be critical in increasing Indonesia and Nigeria, places emphasis and analysis of peace, security, human the effectiveness of the renewed global on bringing together key stakeholders rights and the development agenda partnership.18 from governments, donor institutions and among the governments of member the private sector to enhance international b. Development banks states and other relevant stakeholders cooperation and aid practices globally (academia, the private sector and civil Regional financial institutions (RFIs) also and supporting the formulation of a society). In 2000, Secretary-General Kofi have specific characteristics which make post-2015 development agenda in this Annan launched the United Nations them particularly valuable. They provide a respect. Global Compact,16 a strategic policy sense of ownership of resources and of initiative geared towards the business their destination, given the governance of 7. Social entrepreneurs and social community and committed to aligning its those institutions. RFIs are also familiar innovators operations and strategies with universally with the region’s specific characteristics, a Over the past decade, social innovation accepted principles in the areas of human fact that facilitates dealings with local and entrepreneurship have developed rights, labour, the environment and the authorities. RFIs have shown their ability, from an emerging initiative into a key issue fight against corruption. By taking part, contingent on their lending capacity, to on the business and social development business, a primary driver of globalization, act and respond in a timely manner when agendas, both in industrialized and can contribute to opening up new required. These features have allowed developing countries. Social enterprises markets and fostering progress in trade, subregional institutions to project an balance a social mission with financial technology and finance for the benefit of image of trust and confidence. Moreover, viability and sustainability, existing economies and societies as a whole. The given the incomplete character of the between the public sector and private Global Compact is a leadership platform existing global financial architecture, RFIs markets in both the developed and for the development, implementation and can bridge existing gaps. The region developing world. As Nick O’Donohue, dissemination of responsible and sustain- should strengthen the capacity and scope Vice-Chair of the Global Agenda Council able corporate policies and practices. of subregional development banks to on Social Innovation, has said, “We need With nearly 8,000 corporate participants encompass the provision of trade finance, to unleash a whole new wave of social in over 140 countries, the Global Compact an area in which these banks have been entrepreneurs and help existing models is the world’s largest voluntary corporate playing a role, albeit a modest one. with proven impact grow to scale much sustainability initiative. In developing the Subregional development banks also more effectively. If we get this right, the Millennium Project and its related Millen- need to cooperate more effectively with economic historians of the future will look nium Development Goals (MDGs) in 2002, development banks at the national level. at this generation of leaders and be the United Nations not only displayed a Various initiatives implemented by the grateful. They took the risk and targeted roadmap for development but World Bank, the Development Bank of transformed the prevailing model. They also placed significant emphasis on the Latin America and the Inter-American helped create a world that enriched the need to build global partnerships for Development Bank’s Multilateral many and not just the few.” In Latin development (MDG8) in order to contrib- Investment Fund and social innovation America, initiatives focusing on social ute to achieving such goals. programme, some of which are included innovation and social entrepreneurship in the case studies showcased in this As the report of the United Nations are more recent but are growing quickly. report, are noteworthy examples. System Task Team on the post-2015 development agenda, A renewed global c. Other global and regional conveners partnership for development,17 states: Global organizations such as the World “MDG8 has played a central role in Economic Forum, the Clinton Global galvanizing aid, increasing market access, Initiative (CGI) or the Clinton Climate providing debt relief and improving access Initiative also play a key role in identifying to ICT and essential medicines and other and bringing together actors from forms of support [….] Yet MDG8 also has governments, international organizations, important gaps and systemic shortcom- the private sector and civil society. The ings and there is a large discrepancy Forum has progressively established itself between its initial level of ambition and its as one of the foremost organizations implementation.” Furthermore, a renewed fostering public-private and global partnership will need to strengthen intergenerational dialogue, and global governance by addressing coordinating and integrating stakeholders weaknesses in international arrangements involved in the decision-making process. for collective decision-making. For More recently, CGI has also stressed the reasons of accountability, multistakehold- importance of seeking new solutions to er partnerships could also be main- traditional and emerging development streamed under each thematic goal, thus issues, thereby serving as a catalyst for strengthening the links between goals fundraising to finance innovative initiatives and the means of achieving them. This and projects. These conveners serve as structure would better re­flect the contribu- platforms for collaboration between tions of voluntary and single-purpose governments, businesses and civil society partnerships, which could be coordinated at global, regional, national and local

14 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America In the current context, following the global Partnership financial and economic crisis and the eurozone debt crisis, it is increasingly SOCIALAB: An Example of Enablers: Tools, important for governments or large Social Entrepreneurship corporations to be able to justify the and Innovation in Latin Practices and outcomes and impacts of providing external aid to regions that may be more America Opportunities for dynamic in terms of growth than their own. Furthermore, the use of results- SOCIALAB is a platform operating in Empowering based management techniques and Argentina, Colombia, Chile and Uruguay budgeting tools can significantly enhance that supports entrepreneurship, technol- iPPPs the life cycle of a project, policy or initiative ogy and business models aimed at and ensure greater sustainability. The achieving positive change in the quality of mechanisms for the evaluation of public life of vulnerable populations. It seeks to policy-making and aid policies are also support, identify and disseminate innova- useful tools in assessing the outcomes tive solutions to address traditional issues Recent advances in and impacts of such initiatives. In this related to poverty and social exclusion technology, connectivity, respect, in the area of poverty and social through co-creation and networking. Its collaboration tools and development, the methodologies and methodology and philosophy is to pool the case studies developed by the skills of and synergies between academic improvements in management Massachusetts Institute of Technology, as institutions, private companies and the practices in both the public part of the work of the Abdul Latif Jameel public sector to assist young entrepre- Poverty Action Lab (J-PAL),20 are very neurs from local communities and thereby and private sectors may useful benchmarks, both in terms of foster social innovation experiments and significantly contribute to the methodology and good practices. entrepreneurship initiatives that can be continued or replicated. SOCIALAB is development of PPPs. 2. Access to ICTs and digital supported by the Inter-American Develop- connectivity ment Bank’s Multilateral Investment Fund 1. Management culture and tools for (FOMIN), Movistar Chile. It began as a the public and private sectors ECLAC estimates that the digital spin-off of the regional non-governmental economy accounts for 3% of Latin A culture of results-based management organization TECHO. America’s gross domestic product (GDP), has emerged and has, together with the as opposed to 5% in the European Union, Its main levels of action are: related methodologies and tools, 6% in the United States and 7% in Japan. progressively been adopted by -- Developing and implementing national Over recent years, gaps in access to governments, multilateral organizations social innovation contests for private mobile telephony and broadband and NGOs to provide greater efficiency companies and the public sector to connectivity have slowly been closed and and accountability in policies, identify emerging innovative the take-up has broadened to a majority programmes and projects. In the world of entrepreneurship initiatives. Recent of the region’s population, and demand international cooperation and achievements include work with for and access to mobile broadband have development aid, the use of these tools Colombia’s National Agency for similarly risen. The current reality is a has steadily become a prerequisite to Overcoming Extreme Poverty two-speed process: some countries are ensure efficient delivery and impact and (ANSPE), the government of the city of at 75% of the OECD average, whereas to provide accountability to funders and Buenos Aires and running the annual others are only at 38% of the ICT donors (foundations, governments or “Desafío Clave” contest together with development index. Although there cooperation agencies). They are also a the Chilean National Youth Institute remain inequalities in terms of access, the means to ensure greater accountability in (INJUV, see http://www.injuv.gob.cl/ high penetration and growth of mobile society as a whole, particularly in relation portal/p-a-i-s-joven/desafio-clave/). telephony and digital connectivity have to flows of overseas development aid, made it a matter of urgency for actors, -- Developing global innovation which tend to be lower in middle-income both public and private, to work in concert challenges such as “First 72 hours”, a countries. and treat digital connectivity as a key project currently being run in factor in their strategies and policies within partnership with UNICEF (http://www. an integrated framework. The availability first72hours.org/) to find innovative of collaborative and networking tools ideas focused on the 72 hours (such as social media or massive open following a natural disaster to ensure online courses) also reinforces this trend. the provision of water and food, ICTs, energy and healthcare. As part of this technological revolution, the state has progressively embraced the -- Providing direct support, tools and need to collaborate with or get closer to methodological advice through joint the private sector to improve its efficiency efforts with social entrepreneurs from and transparency through a series of vulnerable communities with a view to initiatives including e-government, open launching social innovation projects. government and whole-of-government Source: SOCIALAB, for more information: http://www.socialab.com. approaches.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 15 3. Innovative financing mechanisms Eggers, W. and Paul Macmillan (2013), The Solution Revolution, How Business, As mentioned earlier, new trends in Government and Social Enterprises are development finance provide new Teaming Up to Solve Society’s Toughest opportunities to combine public and Problems, Harvard Business Review private capital flows, with due account for Press. the specific nature of each. Given that some players have the potential to Graves, C. (2005), The Never Ending increase their role in development finance, Quest: Dr. Clare W. Graves Explores there is space for new mechanisms Human Nature, ECLET Publishing. through which public policies can Mazzucato, Mariana (2013), The generate a climate conducive to private Entrepreneurial State, London, Anthem capital investment and establish an Press. incentive scheme to steer it towards development objectives. New initiatives McKinsey & Company, Committee using public resources to mobilize Encouraging Corporate Philanthropy investment towards development (2010), “Shaping the future: Solving social objectives have appeared in industrialized problems through business strategy”. countries. One such example is Prada, Fernando (2010), World Bank, development impact bonds, which turn Inter-American Development Bank, and social problems into opportunities for Subregional Development Banks in Latin investment. On a different level, emerging America: Dynamics of a System of crowd-funding practices may also Multilateral Development Banks, Asian represent innovative funding mechanisms Development Bank Institute. for civil society and local communities. These may provide an inspiring example Prahalad, C.K. (2011), The Fortune at the for Latin America. bottom of the Pyramid, Pearson Prentice Hall. References Rey de Marulanda, Norah and Francisco Tancredi (2010), “De la innovación social a CECB (Center for Global Development) la política pública”, Project Documents, (2013), Development Impact Bond No. 351 (LC/W.351), Santiago, Chile, Working Group Report ECLAC. Cecchini, Simone and Rodrigo Martinez Rodríguez Herrera, Adolfo and Hernan (2012), Inclusive Social Protection in Latin Alvarado Ugarte (2008), Claves de la America: A comprehensive Rights-based innovación social en América Latina y el Approach, Libros de la CEPAL, No. 111 Caribe”, Libros de la CEPAL, No. 101 (LC/G.2488-P),Santiago, Chile, ECLAC. (LC/G.2394-P/E), Santiago, Chile, ECLAC. Cowan, C. and D. Beck (2005), Spiral Schwab Foundation for Social Dynamics: Mastering Values, Leadership Entrepreneurship (2013), Breaking the and Change, Blackwell. Binary: Policy Guide to Scaling Social Innovation, World Economic Forum. Devlin, Robert and Graciela Moguillansky (2010), Breeding Latin American Tigers, Schuschny, A. (2007), La Red y el Futuro ECLAC and World Bank. de las Organizaciones, Kier. ECLAC (Economic Commission for Latin UN Global Compact (2013), Corporate America and the Caribbean) (2013), The Social Responsibility in the World Digital Economy for Structural Change Economy. and Equality (LC/L.3602), Santiago, Chile. UN System Task Tam on the Post-2015 - (2012), Middle-income countries: a Development Agenda (2013), A Renewed structural gap approach (LC/G.2532/ Partnership for Development, United Rev.1), Santiago, Chile. Nations. - (2010), Achieving the Millennium Wilber, Ken (2001), A Theory of Everything: Development Goals with equality in Latin An Integral Vision for Business, Politics, America and the Caribbean: Progress and Science and Spirituality, Shambhala Pub. challenges (LC/G.2460), Santiago, Chile. - (2008), Structural Change and Productivity Growth 20 years later. Old problems, new opportunities (LC/G.2368(SES.32/4)), Santiago, Chile.

16 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 17 Case 1. Part II University for All Case Studies (ProUni)

Executive Summary ProUni aims to promote access to tertiary education for low-income students with the support of private tertiary institutions in Brazil (incentivized by tax exemptions). From its beginning in 2005 until the first semester of 2013, the programme has provided more than 1.8 million scholarships. To ensure that low-income students apply to the programme, the Ministry of Education has established partnerships with other government agencies and non-profit organizations to provide widespread free access to the Internet. The government has also implemented monitoring procedures by cross-checking information available in different databases to ensure that only eligible students participate in the programme. Geographical scope: Brazil Thematic area: Tertiary education

Description In Brazil, less than 15% of young people between 18 and 24 years of age are enrolled in tertiary education institutions, according to data collected by the National Institute for Educational Studies and Research (INEP).21 This percentage is lower in the north and north-east of Brazil, the poorest regions of the country, where only 10% of young people attend tertiary institutions.22 These data reveal the magnitude of the challenge of achieving goal 12 of the national educational plan23 (PNE), i.e. to increase the percentage of the young population enrolled in tertiary education institutions in Brazil to 33% by 2020. It is noteworthy that Brazil is in a worse position than several other Latin American countries. According to the global innovation index (GII),24 which includes indicators ranking countries in terms of their openness to innovation, higher education is considered crucial for economies to increase productivity. Brazil was ranked 64th out of 142 countries in the 2013 GII, owing to its relatively poor performance in indicators such as human capital and research (75th). While Argentina and Chile were ranked 14th and

18 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 23rd in tertiary enrolment respectively, Figure II.1 : Population Aged 18 to 24 Years Old Attending Tertiary Education in Brazil was ranked 82nd. In fact, even Brazil, 2011 lower-middle-income countries, such as (Percentages) Bolivia and Paraguay, were better ranked than Brazil concerning tertiary enrolment. 25,0%

The Model 20,0% 19,7% 18,6% Target area and characteristics 15,0% 16,1% In 2004, the Brazilian Ministry of 14,6% Education launched the “University for All” 10,0% (ProUni) programme, which aims to 10,4% 10,4% provide academically gifted low-income students with places in private tertiary 5,0% education institutions on partial or full scholarships. Law No. 11,096 of 15 January 2005 established ProUni, and 0,0% students are eligible for a full scholarship if Brazil North Northeast Southeast South Central-West they have graduated from a public high Source: Prepared by the authors, on the basis of information from INEP, “Resumo Técnico do Censo da Educação Superior 2011”. school or have studied in a private high school on a full scholarship, and if their per capita monthly family income is up to 1.5 minimum wages, i.e. 1,017 Brazilian Stakeholders and structure who receive full scholarships are also eligible for a monthly stipend of R$ 300.00 reais (R$), or US$ 440.89 per month. In short, ProUni fosters cooperation (about US$ 130). Students on 50% Students are eligible for a partial between the public sector (Ministry of scholarships can request a loan from the scholarship of 25% or 50% of the tuition Education) and private tertiary education student financing fund to finance the rest fee if they have graduated from a public institutions. For the second semester of of their tuition fees, with no need to high school or have studied in a private 2013, 919 private institutions will be provide collateral. school on a full scholarship, and if their offering scholarships for ProUni’s per capita monthly family income is up to selection process.29 The Ministry of Financing scheme and incentives three minimum wages (i.e. R$ 2,034, or Education has also established US$ 881.78 per month).25 With a view to partnerships with Caixa Econômica Private institutions receive tax exemptions meeting a social need and fostering Federal, one of the largest stated-owned for taking part in the programme and meritocracy, ProUni selects students savings and loan-style financial institutions participate on a voluntary basis. In other based on the score obtained on the in Brazil, the Brazilian Federation of Banks words, the scholarships involve no actual National Assessment of Secondary (FEBRABAN), and the student financing transfer of resources from the Ministry of Education (ENEM),26 to ensure that fund (FIES) to be able to offer ProUni Education to the students or to the students with good academic records students other sources of grants. The participating tertiary education institutions. from low-income families are chosen. Ministry of Education has also established Instead, these institutions receive a tax ENEM is a non-mandatory national exam partnerships with the National Indian exemption up front in the first year of their which evaluates the educational (indigenous peoples) Foundation (FUNAI) participation in the programme. The tax attainment of high school pupils in Brazil, and its regional executive administrations, exemption scheme continues every year and is also used as a standard university the centres for partnerships between that scholarships are maintained for entrance qualification test. The option of businesses and schools (CIEE), and the students who registered in previous offering scholarships to low-income Citizen E-Government Assistance Service enrolment rounds, and scholarships are students in private institutions, instead of (GESAC) to make it easier for low-income provided to new ProUni students facilitating their access to public students to apply by providing according to the formula of one universities, is justified by the sharp rise in widespread free access to the Internet. scholarship for every 10.7 students the number of private institutions. enrolled in the institution. For the time they According to the Explanatory Implementation strategy participate in the programme, tertiary Memorandum 26 attached to the Bill No education institutions are exempt from 27 It is worth noting that the private tertiary 3,582/2004, there were 1,637 tertiary corporate income tax (IRPJ), and are not education institutions must provide free education institutions in 2002, of which required to make social contributions on Internet access to all individuals wishing to 1,442 were private and only 195 were net profit tax (CSLL), on Social Security apply for the programme, thus ensuring public. Moreover, 37.5% of places at the Financing (COFINS) or to the social widespread access to the Internet private institutions were unfilled, integration programme (PIS). More than throughout the ProUni application corresponding to approximately half a R$ 750 million (about US$ 325 million) in process. In addition, the joint actions of million unfilled places, whereas only 5% of exemptions is estimated to be granted in the Ministry of Education with Caixa the places at public universities were 2013 as part of ProUni. Since the creation 28 Econômica Federal and the Brazilian unfilled. of the programme, more than R$ 4 billion Federation of Banks offer ProUni’s (about US$ 1.7 billion)30 has been recipients internships during their tertiary exempted on average. education, enabling students to earn money while studying. Moreover, students

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 19 Figure II.2 : ProUni Tax Exemption, 2006-2013 helps low-income students with the (Reaisa) application process. CIEE, together with other governmental agencies (such as 800 GESAC), assists in the application process by providing low-income 700 students with widespread free access to

Million BRL 600 the Internet.

500 Lastly, the government is introducing a

400 monitoring system to ensure that only eligible students are granted ProUni 300 scholarships. In November 2009, 1,766 200 scholarships were terminated due to irregularities35, and a further 4,253 were in 100 2010.36 These scholarships were 0 cancelled following cross-checks of the 2006 2007 2008 2009 2010 2011 2012 2013 records of ProUni students with other Projection Projection Projection databases, such as the Annual Social Tax Exemption Information Report (RAIS), the National a The Brazilian currency has been extremely volatile. For this reason, the authors preferred to provide financial information in ProUni in Registry of Motor Vehicles (RENAVAM) Brazil’s currency (i.e. reais) to ensure accuracy. and the Integrated Platform for the Source: Prepared by the authors, on the basis of information from the Receita Federal (http://www.receita.fazenda.gov.br). Management of Federal Universities (Pinglfes), and the databases of state universities (Ministry of Education, 2009). Results, Outcomes and In its 2012 report, the TCU concluded Although the number of irregularities Impact that, despite that ProUni continues to represented only 0.45% of the 396,000 have a high rate of unclaimed scholarships in 2009, and 0.94% of the From the beginning of the programme in scholarships, particularly partial 453,000 scholarships in 2010, the need 2005 until the first semester of 2013, it has scholarships, the government has for regular monitoring was clear. Indeed, provided more than 1.8 million adopted several measures to reduce it, on 30 April 2013, the Brazilian Federal scholarships, of which 57% were full such as: changes in the selection Register published Ministry of Education scholarships, as shown in Table II.1. process, introducing single-step Ordinance 8, of 26 April 2013, establishing According to the public opinion survey enrolment, calls for expression of interest procedures to periodically supervise conducted from 13 to 23 March 2009 by in scholarships and a waiting list; sending ProUni students. This monitoring will be the Brazilian institute of public opinion and e-mails to inform students who have carried out by cross-checking databases statistics (IBOPE),31 of the 1,200 former full obtained the minimum ENEM score (databases have been cross-checked scholarship recipients interviewed, 86% informing about ProUni’s selection since 2009) and by processing considered the programme excellent. In process and inviting the Student complaints submitted to the Ministry of fact, 99% would recommend it to relatives Financing Fund to finance the remaining Education. The Ministry will then cross- and friends. It is noteworthy that the tuition fees of students who received only check information in the ProUni database 33 programme has also become a partial scholarships from ProUni. against other official records. The student motivational tool for others: eight out of 10 will have 10 days to submit respondents mentioned that other family Value Elements documentation to prove there are no members felt encouraged to start or irregularities. continue their studies after the experience with the ProUni. Moreover, ProUni Key Success Factors Sustainability improved the employment status and As stressed by Somers, Morosini, Pan Based on the analysis of the overall tax household income of its students: 80% and Cofer (2013), the number of private exemptions from 2006 to 2012, it can be declared to be working after ProUni – institutions participating in ProUni has concluded that ProUni is not an expensive before the experience, only 56% were in been steadily increasing, from 1,142 in programme. By examining the increase of work – and 68% of respondents said that 2005 to 1,304 in 2010. The programme tax exemptions from one year to another their household income had improved. has therefore been readily accepted by (i.e. total tax exemption of year [“n”] minus However, it should be noted that not all the private sector, which has taken part the total tax exemption of the previous scholarships were claimed; more than chiefly because of the tax exemption year [“n-1”]), divided by the number of 35% places were left unfilled in 2010. scheme put in place by the federal ProUni’s new scholarships per year, it is Brazil’s Federal Audit Court (TCU) also government. This policy measure would possible to ascertain the cost of each of identified this problem in its reports for appear to be justified since, according to the new ProUni scholarships. According 2009, noting that the unclaimed rate of the Brazilian Institute for Tax Planning to the information from the Federal ProUni scholarships was significantly (IBPT), Brazil’s tax burden was 36.27% of Revenue Office and ProUni, the 34 higher for partial scholarships, and GDP in 2012. programme costs less than R$ 300.00 recommending changes in the way the In addition to the participation of tertiary (approximately US$ 130.00) per new 32 programme was implemented. In some private institutions, ProUni is supported by recipient since 2010. This shows how cases, the unclaimed rate of partial the non-profit-making Council on cost-efficient the programme is, as scholarships was three times greater than International Educational Exchange indirect costs are kept to a minimum by that of full scholarships. (CIEE), which is active all over Brazil and means of tax exemptions over the years.

20 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Whereas in 2006 the scholarships cost Reproducibility unoccupied. For the government, the R$ 1,146.92 (about US$ 500) per new programme was cost efficient, with no As discussed above, ProUni is a relatively recipient, in 2012 it was only R$ 253.68 need to transfer resources to the private cost-efficient programme that could be (approximately US$ 110).37 However, it is sector. replicated in other developing countries. It important to note that, until 2011, tax is important to verify both whether the Additionally, it is important to ensure that exemptions were calculated on the basis country has a wide range of private the partnership will be a long-term one of the number of scholarships offered by tertiary institutions and whether such and that monitoring and evaluation the private tertiary institutions rather than institutions have a substantial number of mechanisms will be implemented to the actual number claimed. This vacant places that could be used in the ensure the quality and effectiveness of the discrepancy was identified by the TCU in welfare programme to facilitate the access programme. To foster the long-term its report of 200938. Thus, the cost of to higher education for students from partnership with the private sector, ProUni ProUni incoming students per year was low-income families. In the case of Brazil, established that the tax exemptions would actually higher than the amount provided. the high tax burden made it possible to continue every year for as long as the For instance, rather than costing R$ encourage private institutions to private tertiary institutions maintained 292.92 in 2010 (about US$ 127), the participate in the programme through tax scholarships for students registering in scholarships cost R$ 462.79 (about US$ exemptions. Thus, it is also essential to previous enrolment rounds, and provided 200) per new incoming ProUni student.39 choose an economic incentive that is not scholarships for new ProUni students This state of affairs was remedied by No. only cost-efficient for the government, but according to the formula of one full Law 12,431, of 14 June 2011. As stressed also attractive to the private sector. scholarship for every 10.7 students by the 2012 report of TCU, 40 the tax enrolled at the institution. Moreover, the exemption is now calculated on the basis private tertiary institution must sign a of scholarships actually provided, and not Recommendations 10-year contract, renewable for an the number offered by the institution. additional 10 years. ProUni also Nevertheless, it can be said that, even To plan and implement an innovative PPP, established a monitoring mechanism that considering the greater cost of the it is essential to take into account the consisted of cross-checking information programme before the advent of Law No interests of the social group targeted, how available in different official databases to 12,431/2011, the programme is still expenditure on the new programme ensure that only eligible students would cost-efficient. ProUni would therefore would affect the government’s budget participate in the programme. appear to facilitate access to tertiary and what economic incentives could be education while providing value for offered to attract the private partners. In It is possible to state that ProUni is a money, meeting with the approval of the other words, an innovative PPP must successful initiative to open up access to private institutions by providing tax combine these three factors to give rise to higher education. There are, nonetheless, exemptions and enabling the federal a “win-win situation”. In the Brazilian case, some problems regarding the illegibility of budget to be balanced (Catani and Hey, the low number of young people aged some students and the inflation of tax 2007). 18-24 years old attending tertiary educa- exemptions by the private tertiary tion was alarming (i.e. less than 15%), and institutions before the passing of Law No became an issue of public interest. Given 12,431/2011. the high tax burden, a policy based on tax Keywords/tags: Brazil, ProUni, tertiary exemptions was attractive to the private education, private universities, tax sector, since it would be able to pay less exemption, scholarships taxes and places that had previously been

Table II.1 : ProUni Scholarships Provided (2005-2013/1)

2005 2006 2007 2008 2009 2010 2011 2012 2013/1 Total

Scholarships 112,275 138,668 163,854 225,005 247,6 43 241,273 254,598 284,622 162,329 1,830,267(100%)

Full 71,905 98,698 97,6 31 99,495 153,126 125,922 129,672 150,870 108,686 1,036,005 (57%)

Partial 40,370 39,970 66,223 125,510 94,517 115,351 124,926 133,752 53,643 794,262 (43%)

Source: Prepared by the authors, on the basis of information from ProUni, available at http://prouniportal.mec.gov.br/.

Table II.2 : Cost of New ProUni Scholarships Granted per Year (2006-2012) (Millions of reais)

2006 2007 2008 2009 2010 2011 2012

New scholarships granted per year 138,668 163,854 225,005 247,6 43 241,273 254,598 284,622 Cost of new ProUni scholarships 1,146.9 253.68 506.70 379.58 389.37 292.92 237.35 per year (in R$ and US$) (US$ 500) (US$ 110)

Source: Prepared by the authors, on the basis of information from the Federal Revenue Office and ProUni.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 21 References Receita Federal (2011), “Demonstrativo dos Gastos Tributários 2012”, August Catani, Afrânio Mendes and Ana Paula [online] http://www.receita.fazenda.gov.br/ Hey (2007), “A educação superior no publico/estudotributario/ Brasil e as tendências das políticas de BensTributarios/2012/DGT2012.pdf. ampliação do acesso”, Atos de pesquisa Accessed on 14 September 2013. em educação 2, No. 3: 414-429. Receita Federal (2012), “Demonstrativo Corbucci, Paulo Roberto (2007), Desafios dos Gastos Tributários 2013”, August da educação superior e desenvolvimento [online] http://www.receita.fazenda.gov.br/ no Brasil, Instituto de Pesquisa publico/estudotributario/ Ecônomica Aplicada (IPEA). BensTributarios/2013/DGT2013.pdf. Accessed on 14 September 2013. Somers, Patricia, Marilia Morosini, Miriam Pan, and James E. Cofer Sr. (2013), Receita Federal (2005), “Demonstrativo “Brazil’s Radical Approach to Expanding dos Gastos Governamentais Indiretos de Access for Underrepresented College Natureza Tributária – (Gastos Tributários) Students”, Fairness in Access to Higher 2006”, September [online] http://www. Education in a Global Perspective, receita.fazenda.gov.br/publico/ SensePublishers, pp. 203-221. estudotributario/BensTributarios/2006/ DGT2006.pdf. Accessed on 14 Related websites /online material: September 2013. INEP (Instituto Nacional de Estudos e TCU (Tribunal de Contas da União) (2009), Pesquisas Educacionais) (2011), “Resumo “Relatório de auditoria operacional: Técnico do Censo da Educação Superior Programa Universidade para Todos 2011” [online] http://download.inep.gov.br/ (ProUni) e Fundo de Financiamento do educacao_superior/censo_superior/ Ensino Superior (FIES). Relator Ministro resumo_tecnico/resumo_tecnico_censo_ José Jorge, Brasília [online] http://portal2. educacao_superior_2011.pdf. Accessed tcu.gov.br/portal/page/portal/TCU/ on 8 September 2013. comunidades/programas_governo/ MEC (Ministério da Educação) (2009), areas_atuacao/educacao/ “Processo de supervisão encerrra 1,766 Relat%C3%B3rio%20de%20auditoria_ bolsas e desvincula instituições” [online] Prouni.pdf/ Accessed on 16 September http://portal.mec.gov.br/index.php?Itemid 2013. =86&catid=212&id=14681:processo-de- TCU (Tribunal de Contas da União) (2012), supervisao-encerra-1766-bolsas-e- “Acórdão 637/2012” [online] http://portal2. desvincula-instituicoes&option=com_ tcu.gov.br/portal/page/portal/TCU/ content&view=article. Accessed on 8 comunidades/programas_governo/ September 2013. areas_atuacao/educacao/RELATORIO_ MEC (Ministério da Educação) (2010), PROUNI.pdf. Accessed on 16 September “Indicadores – Educação Superior. 2013. “ProUni – Bolsas ocupadas” [online] http:// gestao2010.mec.gov.br/indicadores/ chart_70.php. Accessed on 16 September 2013. PNE (Plano Nacional de Educação) [online] http://portal.mec.gov.br/index. php?option=com_ content&id=16478&Itemid=1107. Accessed on 8 September 2013. PROUNI (Programa Universidade para Todos) [online] http://prouniportal.mec. gov.br/. Accessed on 8 September 2013. Receita Federal (2012), “Demonstrativos dos Gastos Tributários: estimativas bases efetivas 2009 (Série 2007 a 2011)”, March [online] http://www.receita.fazenda.gov.br/ publico/estudotributario/ BensTributarios/2009/DGTAC2009.pdf/. Accessed on 8 September 2013.

22 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America devised in which educational their homes. This led to a high turnover of Case 2. infrastructure was to be built as part of the teachers and the serious problem of the improvement of the neighbourhood. This isolation of schools within their Concession was based on the conviction that these communities. Above all, there were major poor communities needed to be differences between the performances of Schools in integrated into the city and the state had these children in tests, partly due to to be capable of adequately educating the socio-economic factors, but also due to Colombia new generations. the inflexibility of the public system. Educational infrastructure is part of the Innovative model of iPPP make-up of a city, and it was deemed Geographical scope: Colombia, essential to include these settlements in A project was devised to overcome this specifically Bogota the development of the city. Schools also situation. It sought to ensure the sought to address the challenge of construction of schools with outstanding Thematic area: Education ensuring the sustainability of this process architecture that would become of integration into urban normality in terms milestones in the improvement of their of student learning, in order to challenge communities. Although these architectural Executive Summary the traditional link between students’ standards were developed for use in all Schools run under concession seek to socio-economic background and the new school buildings in the district of provide education to marginalized and quality of the education they receive, as Bogota, the new schools in these areas displaced populations by hiring private measured in domestic and international could surpass them. They were also entities with successful experience in the tests. planned as comprehensive institutions, designed to integrate classes from all educational field. The project arose from The Sectoral City Education Plan for school years, from preschool to middle the need to deliver quality education to 1998-2001, aimed to create new places in school. This feature was important to the most vulnerable groups of the local schools, thus increasing the gross address dropout problems caused by the population and has been developed in and net educational coverage of the city. bottlenecks in these institutions, since areas where education is not provided. In this context, it was urgent to address when primary and secondary schools are This alternative option has been offered as the acutely high dropout rates in schools in different locations and students cannot part of the expansion of education as a in marginalized areas of the city, partly go through all cycles of learning in one public service, and is fully funded by the attributable to a lack of places in all location near their homes, there is a state. It is monitored to ensure academic cycles and also to the poor significant risk of their dropping out of compliance with quality conditions quality of teaching methods. The school. stipulated in contracts with the private traditional system had shown its inability providers. The project was first developed to ensure that the poorest children could in Bogota, a segregated city, with acquire standard skills. One of the biggest marginalized areas on the outskirts of the problems faced by the city was how to city that lack public and social services. attract public school teachers to these After an analysis of the positive results, the areas and convince them to work far from project was extended to 23 cities in Colombia, with the aim of providing education to groups that have relocated to urban areas as a result of violence. This Map II.1 : Location of Schools in Bogota’s Marginal Areas case study describes the development of the first schools in Bogota, and some of the results. It describes the level of development attained by the project at the national level.

Description La Estrellita At the end of the past decade, a strategy was developed to integrate some of Bogota’s neighbourhoods into urban life. La Giralda San Cayetano These areas had emerged as a result of San Vicente Bilbao-Parques del Campo migration to the capital and they Nueva Roma Chuniza concentrated the city’s poorest Piedra Verde Nebraska population. These neighbourhoods were Santa Lucia Las Mercedes Miravalle San José not served by the city services and many Buenavista Torquigua of them were illegal settlements. Part of La Joya the strategy included measures to legalize Tintalito Arborizador a Alta Las Margaritas the settlements and to provide them with Bellavista Santa Marta Argelia public services, recreational areas and Los Naranjos Santiago de las Atalayas social services such as education and La Esperanza health. To ensure the provision of quality education to these areas, a project was

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 23 The project also sought to give institutions Contracts had to provide for clearly It was also necessary to convince enough autonomy to take an active role in established rates on an annual basis prestigious private schools to participate their students’ academic performance. (initially indexed each year) and in the project. They were encouraged to Traditional public schools had no disbursement dates. To ensure that future do so for reasons of social responsibility autonomy over teachers or over the payments were made, the concession and because the conditions of the distribution of funds and, thus, had little agreement requires the city council’s contract protected them against any leeway to intervene. Consequently, approval of planned future allocations financial risk. Although schools showed services were provided in this project by throughout the term of the contract. The great confidence in their ability to produce entities that could ensure both the council has approved allocations until good results, they were concerned for the autonomy of the organization and the 2014. potential impact on their academic quality of teaching. The staff members reputation of a possible adverse outcome Likewise, quality results are scrutinized by hired had to provide proof of their of the project. Nonetheless, certain clearly established indicators, and there expertise in the field of education. Schools schools with a clear social focus agreed are clear stipulations governing the that demonstrated their ability to develop to take part, such as those operated by conditions for contract termination and high-quality educational processes were religious communities or the auditing. The approved terms for asked to cooperate under the umbrella of compensation funds41 and several of the contracts allow institutions to disclose the non-profit organizations that had city’s elite schools, one of which belonged results of students who have completed contracts with the city’s Secretariat of to a prestigious university. all levels from preschool to middle school Education. Finally, the concession model (a 12-year cycle). Once the contract Finally, operators were selected for the 25 was chosen, which ensured a sufficiently expires, it may be extended or terminated, schools established. They began strong tie with the city, both in terms of depending on the results obtained by the operating primary classes in the first year time and money (to overcome the threats school. of the programme and high school of political changes). This type of contract classes in the second. requires a public invitation to tender as a Sustainability factors prerequisite, to ensure transparency in the allocation of resources and recruitment, One of the biggest challenges in Results, Outcomes and looking to come up with the best establishing schools in targeted areas proposals. It also provides for long-term was finding land on which infrastructure Impact of the iPPP – Key contracts. could be developed legally. Schools had Success Factors to be placed in areas that were populated Investment in infrastructure was the by “invasions” or illegal takeovers, and The project began to show benefits at an state’s responsibility, considering that many such settlements were without early stage: the development of schools should become architectural utilities and not officially a part of the city. infrastructure, accompanied by other landmarks in the recovery of their Overall, they were areas of high actions performed by the state, managed neighbourhoods. It was decided that the population density, where it was to produce major physical transformations contracts should be signed with non- necessary to find an acre of undeveloped in these neighbourhoods, especially in the profit foundations, institutions capable of land with access to utilities that could be immediate environment of the schools. finding additional resources to provide built on legally. These problems were This responded to the local services. Choosing schools with overcome with the participation of various administration’s city normalization and outstanding results guaranteed a good city agencies. The Treasury guaranteed integration plan. Differences in the outcome. The public invitation to tender the funds for construction and proceeded relationship of schools with surrounding laid down the basic conditions for the to come up with the design, with clear communities were also evidenced. institutional educational project and specifications for teaching requirements Traditionally, public schools (with certain teaching methods. A financial proposal and architectural quality. In the process, it noteworthy exceptions) were isolated from was included, but it was determined that was possible to engage the best surrounding marginalized communities as the costs could not exceed average public architects in the country, in a time of a a result of supposed security concerns or sector spending per student in Bogota. major crisis in the construction business. difficulties faced by teachers in accessing Pursuant to Law 115 of 1994, it was remote locations. Additionally, the ability of decided that, unlike in many public The city council had to give its approval these institutions to involve other schools, the establishments should for future funding to guarantee the institutions allowed them to offer operate in a single shift, to allow for resources needed over the length of the educational services to the community extracurricular activities within the facilities concession. Here, the project met with outside normal school hours (in evenings as well as to provide much needed the opposition of the public teachers’ and at weekends). The high demand for attention to the surrounding communities. union. The main argument against it was these schools has shown that they have It was established that the Secretary of the supposed privatization of education, been accepted by the community. Other Education would administer the student although education in these schools was advantages began to emerge later. The registration process at these institutions, free and funded by the state. Finally, well maintained nature of these buildings using the same criteria applied to all public funding was approved. The discussion was one: while new infrastructure with the education, where the main criteria for the did not lead to industrial action by unions, same characteristics operated under the allocation of places is the proximity to essentially because the project did not traditional public sector model schools. This allowed for greater entail any reduction in public education deteriorated significantly in the first year of community involvement with the and the sites chosen represented a good use, the careful use and good institution and minimized transportation alternative for teachers. Communities also maintenance of the infrastructure by costs. expressed their support. concession schools was remarkable. Finally, after a number of years, systematic evaluations were performed. The World

24 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Figure II.3 : Averages at the common core in Bogota, 2005 - 2009 References: Concession schools vrs. all Public schools Barrera, Felipe (2006), “The Impact of 50 Private Provision of Public Education: Empirical Evidence from Bogotá’s 49 Concession Schools”, World Bank Policy Research Working Paper 44121. 48 Bonilla-Angel, Juan (2010), “The effects of

47 Charter School on Academic achievement, Evidence for Colombia”, 46 Dissertation submitted to the Faculty of

Average Score Common core the Graduate School of the University of 45 Maryland, College Park in partial fulfillment of the requirements for the 44 degree of Doctor of Philosophy. 2005 2006 2007 2008 2009

Public Concession

Bank’s42 findings (data from 2004) show Extension of the project to the country lower dropout rates in these schools at large – reproducibility compared to city-run public schools. As of 2006, the project was extended Likewise, analysis of the results in reading nationwide, as other cities had and math tests shows better results in marginalized populations with similar concession schools than in similar public problems as those in Bogota, as a result schools. It also shows a more rapid of the displacement of rural communities improvement in annual results. Juan to cities that did not have an adequate Bonilla,43 using data from 2008, confirms education system to accommodate them. the positive impact of concession schools This addressed a request from the High on student learning, especially in Constitutional Court for the Executive to mathematics, where they display results provide quality basic services to up to 6% better than in traditional public populations displaced as a result of the schools. A comparison of attainment in Colombian conflict. state examinations of 11th-grade pupils in concession schools against all public Cities with high displacement rates were schools in 2009 is shown in Figure II.3. determined. On account of the country’s decentralized education system, These results are very significant, incentives were established for local because this version of the state authorities that wished to develop the examination included all students in all project, since funding of the infrastructure schools throughout the country, under a is provided by the central government. law that made them mandatory. Quality conditions were set similar to Furthermore, since the socio-economic those that had been developed in the background of pupils is not considered, schools of Bogota, but capacity was this fulfils one of the objectives of the extended by 30%. The local authority is project, which is to provide quality obliged to provide the land, which must education to children from lower-income be in an area where displaced persons families. It is important to note that this make up the majority of the population. test serves as an entrance examination in Service providers are guaranteed a large proportion of the universities in the payment on the basis of commitments by city. Pupils graduating from concession the central government to make transfers schools are therefore better able to calculated according to the number of access higher education than the average children served. The cost per pupil paid to pupil graduating from a public school. providers is equivalent to the cost of national transfers made for the same purpose. Currently, 43 projects are being developed that will serve more than 60,000 students in 20 cities across the nation. There are four schools in operation and others are in various stages of progress. In January 2011, another 17 came into service.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 25 ExE is innovative through its involvement Strategy for implementation Case 3. of the private sector in the country’s public Human Capital in Schools: ExE seeks to education system. While Colombia’s law improve the human capital of schools by Empresarios por does not allow for-profit institutions to strengthening the skills of teachers and provide education services, and while managers through special programmes la Educación private, for-profit schools are not and initiatives, such as Ser + Maestro®, permitted, ExE has created an alternative Rectores Líderes Transformadores, and (ExE) way of involving the private sector as an Marco de Estrategicas Educativas para la active participant in education. Equidad (MEPE). ExE also works to further engage individuals in the education Geographical scope: Colombia Description system, and has a corporate volunteering programme through which staff from Thematic area: Education ExE focuses on primary and secondary member companies play an active role in education in the regions where it operates: schools’ management. Finally, member Executive Summary Antioquia, Atlántico, Bogota and Cundi- companies also organize cooperation namarca, Bolivar, Caldas, Cauca, Quindio, programmes with schools that supply Through Empresarios por la Educación Risaralda, Santander, and Valle del Cauca. students to go on work placements in these companies. (Entrepreneurs for Education – ExE), the Created in 2002, ExE fosters the active Ministry of Education of Colombia and participation of the private sector in the Public Policy in Education: ExE liaises regional education secretariats are improvement of Colombia’s education with local-level committees, such as working closely with the local business system. It is influencing education policy by Comités Empresariales de Apoyo a las community to improve education in the helping to identify goals and develop new Secretarias de Educación, as well as with country’s public schools. The programme strategies to implement them. It is promot- the Ministry of Education’s Advisory focuses on co-responsibility, i.e. on ing better management practices by Board, on which a number of ExE’s own providing an opportunity for the public training school managers and their teams board members serve. Member and private sectors to work collaboratively while also providing post-training support. It companies also meet regularly with the to merge their strengths and bring them to is bringing innovations to teaching by Minister of Education. bear to improve education. ExE works preparing new educational curricula that regionally to channel and mobilize the will be used throughout the country. Lastly, Financing scheme leadership, experience and resources of great emphasis is placed on establishing the private sector to support effective ExE has two sources of income. The first and implementing mechanisms for is made up of contributions received from education policy and efficient monitoring, evaluating and enhancing the management of schools. companies, individuals and foundations, effectiveness of individual programmes and the other is from national or international Progress has been made towards initiatives. All ExE programmes are carefully cooperation partnerships. increasing the number of children in developed through the comprehensive school in Colombia; today, 87% of boys evaluation of existing initiatives and, once During 2012, ExE raised a total of 2.4 and girls nationwide are enrolled in put in place, ExE programmes are billion pesos (US$ 181 million). Its expens- primary schools. Nevertheless, the low continually measured for quality assess- es for the year totalled 2.2 billion pesos quality of education remains a major ment of their ability to improve education, (US$ 166 million), generating a surplus of hurdle to the country’s continued devel- education management and training. 205.6 million pesos (US$ 15 million). opment and growth. The country ranked Key Public Stakeholders: Ministry of 52 out of 65 in the 2009 PISA survey, and Education, regional secretariats for Results, Outcomes and dropout rates remain high, with only 40% education in 12 regions. of students enrolled in primary education Impact of the iPPP completing the 12th grade. Key Companies and Foundations: Avianca, Bimbo, British Council, To achieve its goals, ExE works closely Education levels also vary dramatically Bucaramanga Chamber of Commerce, with the government using a three- across different regions. In rural areas, Comfandi, Vallecaucana Commission for pronged strategy to improve the quality of which have historically been affected by Education, Compania Energetica del education, mobilize public and private military conflict, education levels are Occidente, Consejo Privado de sector individuals from member particularly low. Between 1996 and 2003, Competitividad, Coomeva, Federation of companies and impact public policy. guerrillas, paramilitaries and public agents Colombian Coffee Growers, Argos, Each element of its strategy is monitored attacked 71 schools in such areas. Public Fundacion Bancolombia, Fundacion to continually measure development, investment in primary and secondary Bolivar Davivienda, Fundacion Cavalier progress and effectiveness, and make (K-12) education has also been irregular. Lozano, Fundacion Nutresa, Fundacion adjustments as needed. From 1994 to 1996, spending increased Siemens, Fundacion Sura, Fundacion Its initiatives work in various ways to from 3.09% of GDP to 5.03%, but in 1999, Telefonica, Fundacion Terpel, gasNatural, it dropped to a mere 2.74% owing to improve quality. For example, its Ser + Ingenio Risaralda, Intel, Juan Manuel Maestro® initiative focuses on manage- austerity measures. Between 2000 and Ruiseco Vieira, Madeal, Metrex, 2004, education spending again ment and skills training for school adminis- Microplast, Qualificar, Rehabilitar, trators and teachers. To date, 1,116 increased, from 3.6% to 5.1%. However, TransOriente, Tipiel, Surtigas, Unica such erratic spending leads to individuals have been trained through the inconsistent education policies, affecting Key International Organizations: programme. Its Ola Escolar initiative works the availability of key resources. Inter-American Development Bank, British with foundations to raise money to Council, Community of Madrid complete major infrastructure projects for

26 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America schools, including repairs, renovations Sustainability factors Clear and consistent time-specific and construction work. To date, 11 such metrics must be in place to monitor the ExE’s activities are sustainable because major projects have been completed, status and quality of programmes’ the programme is heavily focused on benefiting over 4,500 children across improvements. Programme evaluation oversight. ExE closely tracks the progress Colombia. ExE also continues to innovate should follow a timeline of, for example, of school managers and their teams for to make an impact on quality of education. two years, with close tracking of goals for over two years to ensure that the In April 2012, it launched a new pro- improvements. Firms must consistently management training provided is put into gramme to strengthen foreign language evaluate their own performance; this practice. Through SIIPE, a new teaching, and today over 400 teachers are experience should be shared with school information system being developed by going through the pilot programme, which officials who must also develop consistent ExE, member companies that have has proven highly successful in raising standards for measuring impact and contributed to the programme are now levels of proficiency in English, and shows progress. Through the adoption of able to keep track of how their great promise for future students. information technology programmes like investments are being spent, allowing for ExE’s SIIPE, which collects information on Recognizing the importance of commu- transparency and ensuring that funds public education programmes and nity involvement for education, ExE works invested go to schools’ priorities. increases public spending transparency, to mobilize an active volunteer force The focus on interpersonal exchanges is governments can monitor new initiatives dedicated to improving management in also critical to the programme’s and companies can track investments schools. Today, ExE has over 440 sustainability. Face-to-face relationship made in education. ExE’s focus on volunteers who have worked with more building between the public and the information gathering and assessment is than 290 educational institutions and private sector at all levels through ExE – important to follow in exporting models for 139,000 members of the educational from the national advisory board of the improvement. community, including school administra- Ministry of Education to the private training tors, teachers, parents and students. Keywords/tags: K-12 education, school programmes for teachers – ensures a management, Colombia, policy Finally, ExE endeavours to influence policy deep, long-term dedication to and on education, including by working closely engagement with the issue. with the national government and having References ExE board members serve on the Reproducibility in other countries Education Ministry’s advisory board to Given ExE’s recognized success in De Carvalho, Andre, Looi, Yiwen, Saad, foster progress in priority issues for Colombia, the initiative has supported the Fabio, Sinatra, Joseph (2013), “Education educational policy. For example, in 2011, development of similar foundations in Latin in Colombia: Is there a Role for the Private at the request of the Minister of Education, America. Peru and Guatemala now have Sector?” [online] http://knowledge. ExE partnered with McKinsey to conduct their own Empresarios por la Educación wharton.upenn.edu/article. an assessment of the current state of programmes that follow a similar model to cfm?articleid=3152. Colombia’s education relative to that of Colombia. A number of other Latin international standards. The results led to Empresarios por la Educacion (2012), American countries have started to the development of a national policy that “Informe de Gestion 2012-2013” [online] replicate the work of ExE through similar works to accelerate education reforms. programmes, including Ecuador, Mexico, http://fundacionexe.org.co/wp-content/ Honduras, El Salvador, Nicaragua, uploads/2013/07/IDG2012_13-BAJA.pdf. Key Success Factors Panama and the Dominican Republic. Empresarios por la Educacion (2013), “Informe Ejecutivo 2013” [online] http:// ExE has helped to establish a lasting fundacionexe.org.co/wp-content/ relationship between public schools and Recommendations uploads/2011/09/Informe-Ejecutivo-2013. the private sector in the country around pdf. Local and national education ministries education, which has traditionally fallen should encourage greater private sector Mora, Jose-Gines “Public-Private within the sphere of influence of the public involvement in determining the plans and Partnerships in Latin America: A Review sector. Leading figures and businesses goals of schools and in ensuring effective Based on Four Case Studies” [online] from the private sector have great resource allocation. The private sector, http://www.hks.harvard.edu/pepg/PDF/ potential to inject fresh ideas into educa- based on efficiency within a competitive events/MPSPE/PEPG-05-08Mora.pdf. tional systems, to bring their political market, has a long history of implementing capital to bear to prioritize education in Novelli, Mario (2010), “Education, Conflict quality controls and effective operations policy-making and to provide resources and social (In)justice: Insights from that are natural in the business environment and fiscal support to financially strapped Colombia”, Education Review, vol. 61, No. but are often lacking in public education. It educational systems. Their involvement is 3. August, 271-285 pp. also has the expertise and human resourc- a valuable asset and much needed es to work with schools, and should follow Novelli, Mario (2009), “Colombia’s catalyst for improvements in public the model of ExE initiatives like Ser + Clasroom Wars: Political Violence Against education, particularly in management. Maestro® and Rectores Líderes Transfor- Education Sector Trade Unions”, Moreover, because the programme madores to provide management and Educational Review, September. concentrates on human capital and leadership training programmes for public interpersonal exchanges, it is able to school managers to increase efficiency and Related website / online material: increase mutual understanding between enhance productivity. School managers Empresarios por la Educación Website: the sectors and to help school managers must be trained to prioritize spending, http://fundacionexe.org.co/?page_id=65. and teachers be more receptive to reform/build school infrastructure, and increasing efficiency in management ensure that schools provides an environ- systems. ment conducive to learning.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 27 Key success factors were the bottom-up Academic TVE programmes were Case 4. strategy followed by the Ministry of outdated in terms of providing the skills Education, which granted autonomy to needed for new technologies, had weak Partnerships for alliances for programme execution and links with secondary schools and industry budget allocation, and the furnishing of an and were overly concentrated on a small Progress and adequate policy environment that number of career paths. In addition, TVE provided incentives, timely technical providers worked with out-of-date, Inclusion, assistance and evaluation to the alliances. run-down equipment and had neither The Ministry of Education has now adequately trained teachers nor good Strengthening launched a second phase of the pro- quality teaching material. Both public and gramme to extend the alliances’ work to private TVE providers were concentrated Technical and other productive sectors. The key lessons in just three parts of Colombia – Bogota, learned for replicating the experience are Antioquia and Valle – which housed only Vocational to ensure government ownership to 38% of the country’s young people provide the alliances with autonomy for between 18 and 24 years old. To address Education in decision-making and resource allocation, these challenges, the Government of while at the same time providing invest- Colombia enacted new legislation – Law Colombia ment and deploying substantial technical No 749 of 2002 – and launched the and financial resources to help them “Strengthening Technical and achieve common partnership objectives. Technological Education Programme” aimed at improving the coverage, quality Geographical scope: Latin America/ and relevance of TVE in respect of the Colombia Description needs of the productive sector, and Thematic area: Technical and vocational fostering progress in national and regional At the beginning of the new millennium, education (TVE) development, and science and Colombia was facing important chal- technology. The programme entailed the lenges regarding the quality of its TVE, formation and management of strategic Executive Summary which resulted in an insufficient supply of alliances among key public and private skilled labour and limited job opportunities sector actors, who, in partnership with the To address the problems associated with for new entrants into the labour market, Ministry of Education, would pursue the the coverage and quality of technical and especially young people. According to the programme’s goals. The programme was technological education, the Ministry of National Council for Economic and Social implemented from 2005 to 2011 at a cost Education of Colombia, with the support Policy Document (CONPES), the main of US$ 35 million, of which CAF provided of CAF, launched the “Strengthening problem with TVE was the low enrolment US$ 15 million through a loan. Technical and Technological Education rate, particularly among the lowest income Programme”, which relied on the forma- groups. In 2003, the enrolment rate for Innovative model of PPP tion of alliances among public and private TVE was 4.1%, placing Colombia below sector actors: tertiary and secondary edu- the regional average. Even in the lower Under its main component, the cation institutions, regional and local income quintiles, university education was programme encouraged the formation officials, producer associations, industry preferred to TVE, which led to a significant and management of 40 regional and local and firms. These partnerships, together gap in access to higher education among alliances with a double aim: to facilitate with the Ministry of Education, forged links them. This also explained why enrolment coordination between secondary and between secondary and tertiary technical rates in university education, and not TVE, tertiary education, and to design high- education institutions. They devised were growing over time. quality, competency-based, vocational high-quality, competency-based technical and technological training programmes that catered for the needs of the produc- Figure II.4 : Colombia: Higher Education Enrolment Rates by Income Quintile, 2003 tive sector and fostered progress in (Percentages) regional and national development and in science and technology. 50 45 After four years of operations (2006-2010), the alliances had created more than 263 40 accredited academic competency-based 35 TVE programmes and opened up 42,958 30 new places in higher education by 25 providing technical and financial assistance to schools. A total of 175,186 20 school students benefitted from this, of 15 which 57,111 undertook professional 10 technical programme modules. According 5 to data collected on employment, more 0 than two-thirds of the graduates were 1 2 3 4 5 employed in the formal sector, with an Income Quintiles average monthly starting salary of over VET University Total US$ 500. Source: DNP (2005). Document: CONPES 3360.

28 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America technical and technological academic The Ministry of Education followed two According to the programme’s evaluation programmes that catered for the needs of lines of action: first, the promotion, reports, its main outcomes and effects the productive sector and fostered establishment and management of new are: progress in territorial development and alliances, which entailed a selection -- There has been a successful paradigm science and technology. The alliances process based on geographic location shift from a traditional to a “hybrid were located in 27 geographical and strategic productive sector criteria system”, which has broadened the departments of Colombia and served four and a process called “Multiplication of consensus on the economic and social sectors of the economy: agriculture, Knowledge”, in which participating value of competency-based technical agro-industry, industry and manufacturing alliances provided their experience to education, programmes coordinated and services. other potential alliances in different with secondary education and on sectors and regions. The second line was To formalize the partnership, the alliances public accountability for meeting focused on quality assurance, including had to acquire legal status, which entailed industry training needs. the definition of methodologies to guide defining their geographical scope, ranging alliances in the drawing up and -- The engagement of industry was from one to multiple territorial depart- implementation of academic consistently evident through the ments. The projects implemented had a programmes. The Ministry of Education design, selection and incorporation of duration of one to four years, depending also carried out continuous quality competencies and modules into most on when they were granted funding. All monitoring to identify key issues requiring new academic programmes. actors involved – tertiary and secondary specific actions and provided technical education institutions, regional and local -- Strong support from the private sector assistance covering academic, financial officials, producer associations and firms has been secured for the new and legal aspects of the projects. – had to join forces to design, develop, coordinated programmes, stretching secure accreditation for, and implement To finance the alliances’ projects, the from secondary level through to new practical, competency-based Ministry of Education established a universities, resulting in high levels of academic programmes, which provided competitive fund of US$ 25 million and enrolment in TVE. direct employability skills in line with granted, on average, half a million dollars -- Students who would never have international standards. However, the to each alliance. In addition, alliances contemplated pursuing higher responsibility for leading the process of were required to provide co-funding of education, particularly in more distant systemic change was given to the 30%; yet, in the event, their total regional areas, have been enrolled, managers of private educational institu- contribution was four times the amount enabling them to join the workforce. As tions, who were given a comparatively provided by the fund. the available data shows, 67.2% of small amount of funding and tight graduates are employed in the formal timelines, to develop new institutional sector, with an average monthly capability, manage complex processes of Results, Outcomes and starting salary of over US$ 500. organizational change and engage more Impact directly – and with greater accountability – with the industries, markets and The alliances drew up 293 competency- Key Success Factors communities that they served. based academic TVE programmes, of which 263 were accredited by the The 40 alliances comprised 97 unions Bottom-up strategy: Rather than National Commission for Quality and/or private producer associations, 129 imposing complex policy and rule change Assurance in Higher Education companies, 19 research and develop- from the top, the Ministry of Education (CONACES). These programmes opened ment and innovation centres, 63 higher employed a bottom-up strategy that led to up 42,958 new places in higher education education Institutions and 532 secondary a successful grass roots involvement of (HE), and through coordination with education institutions in 245 municipali- managers and leaders, teachers, parents, schools and the provision of technical and ties. The role of the productive sector was administrators, students, industry financial assistance to them, 175,186 to guide the design of occupational associations, individual companies and school students benefited from the profiles according to their needs, which different levels of government working programme, of which 57,111 undertook were incorporated into the practical together for a common set of goals. This professional technical programme academic programmes designed by the has provided a sound platform for modules. Table II.3 summarizes the main education institutions. In turn, regional and ongoing systemic reform. results by economic sector. local governments were responsible for supporting these partnerships through the development of local policies and proactive management. Several alliances Table II.3 : Results by Economic Sector also counted on the support of research centres and other training agencies to Agriculture Agro-industry Industry and Services integrate their experience and know-how manufacturing concerning TVE. --10 alliances --7 alliances --13 alliances --10 alliances --48 programmes --40 programmes --84 programmes --95 programmes --31,395 secondary --35,207 secondary --43,163 secondary --65,420 secondary students attended of students attended of students attended of students attended of which 12,497 were in which 15,468 were in which 10,806 were in which 18,340 were in coordinated coordinated coordinated coordinated programmes programmes programmes programmes --9,134 new places in HE --7,806 new places in HE --8,987 new places in HE --17,031 new places in HE

Note: Of these academic programmes, 31% are classified as virtual or distance education.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 29 Budget autonomy: The Ministry of Reproducibility in other countries Another recommended action is the Education provided the autonomy for the development of an adequate policy Although this initiative was launched and alliances to freely allocate the funds environment including the provision of implemented within a particular policy granted, as long as they followed the mechanisms and tools such as environment – i.e. ad hoc legislation, regulations set out by the Ministry of methodologies, guidelines, standards, political support, and institutional Education. monitoring and evaluation systems and arrangements and mechanisms for institutional arrangements. These are Regular institutional strengthening and reform assistance and sustainability – that essential for ensuring that partners carry monitoring and evaluation: In addition to conditions its replication, the initiative’s out their activities in accordance with the the monitoring and technical assistances principles could be followed in the existing technical standards and financial provided by the Ministry of Education, the formulation of other countries’ innovative regulations. alliances themselves made significant partnership projects. A short discussion efforts and invested considerable follows: A permanent communications channel resources in professional development between the government and the Following a bottom-up approach is programmes to support their members in participating parties also should be strategically important for triggering key areas. The Ministry of Education also established to ensure that timely coordinated actions among main required the alliances to carry out adjustments can be made and additional stakeholders while ensuring the neces- self-evaluations, which enabled them to support can be provided to the partners. sary legitimization of the project’s take control of their actions and objectives. Actions requiring inputs from Lastly, to ensure the sustainability of the outcomes. the target population or potential recipi- partnerships, governments should ents can benefit most from this approach. establish from the inception of the project Sustainability factors the funding sources mechanisms, Decentralized resource allocation: Given Social benefits of TVE: To ensure a including the partners’ co-funding. its contribution to achieving efficient and growing flow candidates enrolling in TVE, effective resource allocation, this principle Keywords/tags: Technical and vocational the Ministry of Education implemented a should be replicated in public-private education, partnerships, Ministry of dissemination and advertising campaign partnerships with the necessary Education of Colombia entitled “Pursuing a career in a technical monitoring and accountability measures. or technological sector gives you a place in life”, that informed school graduates of Self-evaluation culture: The decision of the References the potential benefits of pursuing these Ministry of Education to invest the careers. By working on the demand side, alliances with the responsibility for Box Hill Institute (2009), “Proyecto the Ministry of Education has contributed carrying out their own impact evaluations Fortalecimiento de la Educación Técnica y to overcoming students’ reluctance to opt enabled them to take control of their Tecnológica en Colombia: Evaluación de for these careers. actions and outcomes. The availability of Medio Término”, unpublished. methodological guidelines and training Institutional development and good Box Hill Institute (2011), “Proyecto de facilitates replication of this feature in other governance: The programme’s Fortalecimiento a la Educación Técnica y initiatives and places. component “Institutional strengthening of Tecnológica en Colombia. the Ministry of Education and higher Leadership and institutional development: Sistematización y Prospectiva”, education governing bodies” developed These actions should also be replicated in unpublished. institutional capacity within the Ministry of any other partnership initiative because of Forero Cárdenas, M (2012), “Educación Education and local education authorities, their crucial role for providing an adequate Técnica y Tecnológica para el Empleo”, and supported the process of policy environment and regular support to paper presented at the Ibero-American decentralization of higher education the partnerships in their tasks execution. Seminar on Vocational Training and institutions that were still attached to the Education, Lima, 23-24 April. Ministry of Education. Thus, the alliances counted not only on the support of the Policy Recommendations Ministerio de Educación Nacional (2010), Ministry of Education in terms of technical “Informe Final Proyecto de Fortalecimiento assistance but on existing key institutional As a first concrete action to embark on an a la Educación Técnica y Tecnológica en arrangements that set an adequate policy innovative partnership, governments Colombia”, unpublished. environment, such as quality assurance should assess the advantages of pursuing partnerships to tackle specific systems, organization networks and Related website / online material: policy guidelines for major programme development issues as was carried out in https://www.dnp.gov.co/CONPES.aspx reforms. this case in Colombia, given the significant investments of material resources, efforts http://www.mineducacion.gov.co/1621/ A planned second phase: Since the and time required for partnerships w3-propertyvalue-48167.html: programme was considered a pilot, the formulation and implementation. This step Fortalecimiento de la Educación Técnica Ministry of Education integrated part of its is also crucial for ensuring government Tecnológica – Ministerio de Educación. activities into its regular work programme, ownership. which ensured budget funding for continuing and enhancing the work of Second, ex ante conversations among alliances. the potential partners are necessary to identify to what extent their interests are aligned and the extent of their institutional and financial capacity to carry out actions according to the objectives and standards set for the project.

30 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America A look at women’s economic autonomy in In sum, there are numerous studies both Case 5. the region shows that one in three women within and outside the region that take does not have an income of their own, account of women’s contribution to the Promotion of whereas, according to data from the economy as well as obstacles faced; Gender Equality Observatory for Latin there are also clear opportunities for Productive America and the Caribbean, only 11.7% of integrating women’s affairs in the regional men are in the same situation. Despite the agenda for productive and equitable Development demonstrated economic growth and development. Policies, mechanisms and overall reduction of poverty, there has institutions, however, need to be through the been a simultaneous and steady increase strengthened to efficiently address in the feminization of poverty, challenges relating to growth with equality, Inclusion of demonstrated by the proportion of including gender equality. Women in Quality women living in poverty, which reached The initiative, part of the ECLAC 118 women for every 100 men in 2012. programme of cooperation with the Employment in When women are employed, it is often in Federal Ministry of Economic Cooperation part-time precarious or informal work, and Development of Germany (BMZ), was Central America which is centred in sectors of low first implemented in 2013 in Costa Rica productivity. Some of the barriers women and El Salvador. More recently, it is being face include access to credit, property replicated in Panama and outside of the and assets, burden of total work time Central American region in Peru. It is when both paid and unpaid work is taken Geographical scope: Central American focused on the development of public into account, as well as cultural values, countries policy proposals to improve the conditions discrimination and gender-based of the involvement of women in dynamic Thematic area: Women’s economic violence. growth sectors, based on existing empowerment and gender equality. Despite existing evidence of economic knowledge in relation to the productive and social benefits of integrating women work of women in the region and ensuring Executive Summary in productive development, as well as the an active engagement of cross-sectoral opportunity cost of not doing so, there are stakeholders and social organizations. This initiative aims to harness both public few if any active policies in the region that The objective is to reach an agreement and private sector know-how and are promoting women’s productive between public and private institutions for experience to identify key public policy employment. Where protective labour the implementation of policy recommendations to increase women’s measures have been introduced, this has recommendations. This is achieved by economic autonomy and, more not been extended to small or informal identifying key actors in each country, and specifically, to create more quality enterprises, where women are subsequently organizing a series of employment for women in dynamic overrepresented. Although women’s national workshops to provide visibility for sectors of production. Implemented economic participation has increased, existing policies and programmes in the during 2013 in Costa Rica, El Salvador there has not been a significant change in country, improve coordination across and more recently Panama, the initiative legislation or institutional support to sectors and disciplines, identify remaining has also been extended to Peru. promote shared responsibilities with challenges and, finally, adopt a common regard to reproductive and care tasks, agenda. which remain within the family and are Description almost the sole responsibility of women. While Central America has demonstrated Governments in the region have significant potential for economic growth developed plans and policies for gender in recent years, even overshadowing equality with specific objectives aimed at other parts of the region, inequalities promoting women’s economic persist. From the gender perspective, participation. However, these plans do not there is an inefficient use of women’s form part of the state economic and capabilities. Women’s access to business agendas, or, for that matter, education often exceeds that of men, yet those of ministries of economy, trade labour participation rates and wages unions, chambers of commerce, remain significantly lower for women than producer associations or the national for men. This can be attributed in part to a financial system. Often, gender policies lack of policies to encourage shared and plans have limited resources and responsibilities in care between men and focus on providing support to small women, but also between the state, the producers, microcredit or other non- market and families. financial services, and therefore find it difficult to provide sustainable and lasting benefits in terms of women’s integration in quality employment sectors of potential growth.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 31 The project adopted a participatory Four technical meetings took place in Key Success Factors implementation strategy based on 2013, each with the participation of constant communication with between 30 and 40 representatives from Throughout the implementation of this stakeholders and the establishment of the public and private sectors. The initiative, governments and ECLAC have dialogue and consensus-building which meetings allowed firstly a discussion of made unstinting efforts to engage in a harnesses the knowledge and experience the current situation and available process of continuous learning by taking of both the public and the private sector in programmes and support, and on board lessons learned in the the selected countries, bringing together subsequently engaged stakeholders in workshops and seminars that examine different disciplines, institutions and social working groups to develop and design an the specific characteristics, contexts and actors. The aim of including a intervention strategy to improve the institutional constraints in each country. multidisciplinary approach, entailing a economic situation of women in Costa Key success factors identified have been public-private partnership, favours the Rica. An implementation plan for the the necessity to engage the private sector adoption of common approaches and strategy is now being finalized. In parallel in the assessment and design of public strategies and creates synergies. to this work, a survey was launched with policies in which all sectors have a role, the support of women’s associations to reinforcing the need for dialogue and In Costa Rica, the principal stakeholders map the situation of women consensus building both within different involved from the public sector are the entrepreneurs, and provide these women sectors of the government and between Ministry of Economy, Industry and Trade with a voice in the design of the public the government and the private and the (MEIC) and the National Women’s Institute policy recommendations. Over 800 non-profit sectors. The engagement of (INAMU), which, together with the Ministry responses were received and analysed. different stakeholders in the development of Agriculture, have been leading the The progress made in Costa Rica was of new policy recommendations is key to project implementation. During the course shared with other countries at the XII their ownership. Throughout this process, of the project, the Ministry of Science, Regional Conference on Women in political leadership by the leading Technology and Telecommunications October 2013. Future activities include the ministries has proved to be key in (MICITT) and the Ministry of Labour and design and launch of a Web portal to ensuring that all actors participate and are Social Security also joined the initiative. centralize all the information relating to engaged, as well as for the sustainability From the private sector, key policies and programmes strengthening of the dialogue and proposals developed. representatives include private companies women’s autonomy in Costa Rica, with such as Wal-Mart and Intel, as well as the the aim of making it more accessible to Sustainability factors national chamber of commerce, the potential beneficiaries. chamber of industry and the chamber of By employing a strategy that engages all technology, as well as associations of The project in El Salvador was launched relevant stakeholders from the public and women leaders and entrepreneurs and on 2 May by the Minister of Economy private sectors, the initiative has built trust the Business Association for together with the National Institute for and led to ownership of project objectives Development. Women’s Development (ISDEMU). Since by the participating actors, and has struck then, three technical meetings have taken the right balance between processes and In El Salvador, the initiative has been led place with 40 representatives of different results. The project aims to promote by the Ministry of Economy and the ministries as well as civil society. The sustainability on three levels: political, National Institute for the Development of meetings served to give visibility to the through the Regional Conference on Salvadoran Women (ISDEMU) as well as work being done on women’s economic Women in Latin America and the the Technical Secretariat of the empowerment and improve coordination Caribbean; technical, by strengthening Presidency, which joined a few months among different sectors. As a result of national capacities of both the public and into the project. From the private sector, work carried out at the meetings, a report the private sector and their coordination, the Chamber of Commerce and Industry has been drafted and is in the process of as well as ensuring knowledge sharing; and a number of key civil society actors being published. The meetings also and social, expressed through the have become involved. served to secure a national-level participation of organizations of women agreement including key policy workers and entrepreneurs which Results, Outcomes and recommendations on how to increase promotes the continuity of the project and women’s economic autonomy. Progress its results. Impact of the iPPP made was shared with other countries at the XII Regional Conference on Women in In Costa Rica, a first meeting with October 2013. approximately 40 representatives of the public and private sectors was held on 18 February 2013, which opened the dialogue on the role of women in the Costa Rican economy and some of the key barriers they face in finding quality employment. The project was officially launched on 10 May by the Minister of Economy and Minister of Agriculture together with INAMU, following a high- level dialogue between these ministries and key selected representatives of the private sector.

32 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Reproducibility in other countries The project also revealed the need to strengthen official statistics on women’s Originally, the project was planned to be economic autonomy, especially with implemented in Costa Rica and El regard to economic indicators and data Salvador, with a view to sharing lessons and key issues such access to credit, learned with other countries in Central productive assets including land and America through the Council of Ministers technology. of Women of Central America and the Dominican Republic (COMMCA), part of the Central American Integration System References (SICA). Over the course of 2013, the two participating countries shared their experiences at the XII Regional Related websites / online material: Conference on Women in Latin America See [online] www.cepal.org/cgi-bin/ and the Caribbean, held in October 2013 getProd.asp?xml=/mujer/noticias/ in the Dominican Republic, as well as the noticias/7/50077/P50077.xml&xsl=/mujer/ related subregional preparatory meetings tpl/p1f.xsl&base=/mujer/tpl/top-bottom. which took place in May 2013. As a result xslt of the shared experience of Costa Rica and El Salvador, two countries – Panama See [online] www.eclac. and Peru – specifically asked ECLAC to org/12conferenciamujer/noticias/ replicate the experience. In Panama, paginas/0/49920/Mayi-Antillon- project activities began in October 2013 presentacion-mesa-redonda-DP-CRM_ and the first meetings of public and private XII.pdf sector representatives took place in See [online] www.elfinancierocr.com/ January and February of 2014. In Peru, pymes/Costa-Rica-estimara-produccion- the project was launched in November nacional_0_207579939.html 2013 with a cross-sector commitment signed by the Ministers of Women and http://www.mimp.gob.pe/index. Vulnerable Populations, of Productivity, of php?option=com_content&view=article&i International Commerce and Tourism, of d=4504:ministerio-de-la-mujer-presento- Labour and Employment Promotion, and proyecto-que-favorece-empoderamiento- of Economy, who agreed to work together y-autonomia-economica-de-la- to implement the initiative, and the first mujer&catid=54:noticias-en- bilateral meetings with the Chamber of texto&Itemid=445 Commerce of Lima, the Association of Exporters and the Association of Women Entrepreneurs of Peru.

Policy Recommendations The response from governments participating in the XII Regional Conference on Women was very supportive of this initiative, to the extent that a specific request was included in the Consensus of Santo Domingo in which countries: “Urge the Economic Commission for Latin America and the Caribbean, through the Division for Gender Affairs, to carry forward action to promote production development and women’s economic autonomy by raising the profile of women engaged in production activities and designing and implementing an integrated, inter-agency and intersectoral approach for the support of women entrepreneurs, women producers and businesswomen within value chains” (Article 68).

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 33 Description reluctant to invest the time and money Case 6. Global required to support personnel seeking Universities have long been recognized as advanced degrees in the United States. University being important drivers of political, For universities and potential economic and social development. In the counterparts, the challenges of rethinking Engagement United States, numerous studies have global university partnerships as mutually provided evidence of a correlation beneficial PPPs are therefore linked to between strong university-community academic, financial and workforce relationships and economic growth. development concerns. Cornell University and the Government of (Devol, 1999; Bartick and Erickcek, 2008; Panama Panama is one of the fastest-developing Shaffer and Wright, 2010; Trani, 2010). At countries in the world, and recent the national level, US government Geographical scope: Panama economic projections by the World Bank subsidies to higher education, dating to suggest that Panama will continue Thematic area: Educational development the Morrill Land-Grant Acts of 1862, have growing at a steady rate44. According to provided incentives for a range of Panama’s president, (Martinelli, 2013), knowledge-sharing partnerships between Panama’s geographical position in Central Executive Summary the federal government and domestic US America is logistically advantageous, universities. Universities in the United facilitating competitive transportation and Panamanian President Ricardo Martinelli States also frequently serve as pools of freight connectivity through land, sea and signed a memorandum of understanding expertise and technical assistance air. As President Martinelli notes: “Panama (MOU) with Cornell University to develop concerning international development is an ideal site for doing business in the one of the first public-private partnerships activities. However, many of these global region as a result of its open service (PPPs) created by Cornell and a sitting engagements are characterized by economy, political and social stability, head of state (Cornell Institute for Public high-level peer-peer interaction, where dollarized economy, position as an Affairs, 2013). The purpose of this faculty and staff from US universities international financial centre and world- relationship was to use Cornell’s status as provide consulting and advisory services class logistics platform.” a global university to foster human capital to counterparts in host countries. development, economic growth, social Because this traditional, unidirectional The current rate of infrastructure welfare and sustainable infrastructure. model of global university engagement development in Panama through public- The Martinelli administration believes that, does not involve shared financial or private partnerships is unprecedented in through academic partnerships, Panama operational risk, it does not fit the mould Central America (Roy, 2013). can overcome the gap in professional of a conventional public-private Nevertheless, the country has been education that is jeopardizing economic partnership. lagging behind in human development, prosperity and sustainable development particularly in education. The lack of in Panama. The global innovation economy has educational opportunities in Panama has expanded the role universities can play in the potential to jeopardize the economic The Cornell Institute for Public Affairs fostering innovative and sustainable prosperity of the country. According to (CIPA) developed a strategic alliance led solutions to complex public policy Mattson and Teran (2011), as cited in the by faculty, students and the President challenges. At the same time, many Global Competitiveness Report 2011- himself to prepare civil servants and select university presidents in the US have 2012, Panama’s primary education ranks Panamanian students for the demands of advocated redefining major research 129th among 134 countries, and in higher the global digital economy. The areas of institutions as “global universities” with an education, Panama is ranked 128th. As a expertise at Cornell and CIPA will prepare obligation to build human and institutional result of the gap between economic students to address policy issues on capacity, alleviate poverty and reduce growth and human development, the PPPs, infrastructure, science, technology, inequality around the world (Skorton, government launched an aggressive economics and financial policy, 2008). For universities to assume this campaign to develop partnerships with sustainable development, government, obligation, a substantial departure from global academic institutions, as well as politics, human rights, social justice, the traditional, unidirectional model of scholarship programmes for civil servants international development and public and global engagement is required. This new and deserving students pursuing degrees non-profit management. The model relies approach also requires meaningful abroad. on innovative funding mechanisms to collaboration, where local stakeholders provide financial support for students and play a critical role in defining the goals and Mattson and Teran raise the issue of rethinks the distribution of benefits and approaches applied in university challenges faced by the country as a risks that characterizes traditional, partnerships. Finally, this commitment result of a widening education gap and unidirectional university-government entails rethinking the distribution of risk in accelerated economic growth: “A global partnerships. university partnerships, as global crossroads with 4% of global trade universities and institutional counterparts moving through its canal, Latin America’s abroad become co-investors in human two busiest ports and a communications capacity building. Despite great demand and financial infrastructure that draws for the kind of academic and professional global investors, Panama is running out of development offered by global skilled workers.” The increase in foreign universities, the tuition at many of these direct investment and heavy investment in institutions often prices out high-calibre infrastructure have stretched the country’s students with limited financial means. labour market, revealing the need for Likewise, governments seeking training highly specialized human capital and opportunities for civil servants are capacity building in the public sector

34 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America workforce. Skilled administrative available to any applicant meeting the Sustainability factors personnel are required to fill critical needs selection criteria of both parties. For No negative environmental concerns are positions in ports, business centres and general applicants, Cornell and IFARHU anticipated as a result of this programme. free trade zones. While Latin America’s have each agreed to co-sponsor 50% of a However, the partnership will provide economic inequalities are among the student’s tuition expenses. students from Panama with access to a most extreme in the world, and are The innovative nature of this PPP is rooted wide range of research and teaching reflected in very poor education for all but in the distribution of financial and resources at Cornell focused on the wealthiest, Panama has even more operational risk across both stakeholders environmental sustainability, including the severe challenges. As Mattson and Teran (Cornell University and the Government of Atkinson Centre for the Environment, the argue, no other Latin American nation Panama). Financial co-investment Johnson Graduate School of “combines greater wealth than several expanded graduate educational Management’s Centre for Sustainable European nations and almost double-digit opportunities for low-income and Global Enterprise, and the Cornell NYC economic growth with one of the worst government applicants. In addition to Tech Campus. This will enable students to education systems in the world. Except financial co-investment, from an learn and implement sustainability best Panama.” operational perspective, Cornell created a practices in Panama and throughout Latin specialized degree programme for civil America. Innovative model of iPPP servants that was tailored to Panama’s In the Cornell University-Government of needs, and adjusted the time to degree Reproducibility in other countries Panama model, Cornell developed a completion from four to three semesters Reproducibility in other Latin American memorandum of understanding that for civil servants. countries is anticipated to be high. Many established two degree tracks for countries either maintain a government obtaining the Master’s degree in public Results, Outcomes and agency or office similar to IFARHU that is administration (MPA) from the Cornell responsible for overseeing grants for Institute for Public Affairs (CIPA). The first Impact of the iPPP higher education, or work closely with track is designed for civil servants in the non-governmental organizations that The Cornell University-Government of Panamanian government with five or sponsor such programmes. Cornell is Panama model was approved by both more years of relevant experience in currently in discussions with potential parties in April 2013. After the agreement public service. Applicants through the civil government or NGO counterparts in was signed by President Martinelli and service track receive full tuition Costa Rica and Brazil to replicate this representatives of Cornell University, a sponsorships through the Institute for the programme. A major obstacle is funding: delegation from Cornell travelled to Training and Use of Human Resources not all governments will be able to commit Panama to meet with IFARHU (IFARHU), a government agency that to the type of funding arrangement that representatives and finalize recruitment provides scholarships to citizens of was developed in the Cornell University- and selection logistics. Parties anticipate Panama seeking undergraduate and Government of Panama model. In these the first cohort of students from Panama graduate degrees abroad. CIPA has cases, a triangulated funding approach to begin their MPA course in the first committed to funding an internship or involving government, the private sector quarter of 2014. research project undertaken between the and academia might be required to first and second years of study, as well as sponsor students. Other potential an assistantship that would enable civil Key Success Factors obstacles to reproducing this programme servants to support advanced research may emerge in the MOU development undertaken by Cornell faculty members. Key success factors include shared stage. There were a number of legal Given Panama’s interest in developing values of flexibility and efficiency, as well issues concerning liability, intellectual human capacity in technology and as a comprehensive buy-in among property and controlling jurisdiction that infrastructure, CIPA created a specialized, stakeholders. Operational flexibility required resolution before Cornell intensive degree focus that provides allowed both parties to make University counsel and counsel from the training in transportation project design, accommodations and concessions to Government of Panama would finalize the management, and evaluation. ensure the cost and effectiveness of the agreement. There are two potential Traditionally, the MPA degree at Cornell is partnership. Because this initiative was sources of incompatibility in this regard: a two-year, four-semester course of spearheaded by President Martinelli, incompatibility between academic and studies. In this programme, applicants aspects of the MOU that were public sector protocols on these issues, through the civil service track are able to controversial from the government’s and cultural incompatibility between the complete the degree in three semesters of perspective were efficiently negotiated United States and counterparts on these coursework, with the fourth semester and resolved. Likewise, internal issues. spent completing an in-service research stakeholders at Cornell, including project in Panama. This three-semester university administration, CIPA option was developed as a means of administration and area studies making the arrangement more cost- programmes, worked collaboratively to effective for the Government of Panama, ensure an equitable distribution of and reducing the amount of time civil benefits and risks. Administrative issues servants spend out of service. Cornell and that remained problematic were IFARHU established a cap of six students addressed by peer-level collaboration per year sponsored through the civil between Cornell and IFARHU service track. In addition to the civil representatives. service track, Cornell and IFARHU developed a general application track

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 35 Policy Recommendations References Cornell University and the Government of Bartik, Timothy and George Erickcek Panama have taken the lead in developing (2008), The Local Economic Impact of an innovative global university partnership ‘Eds and Meds’: How Policies to Expand model. If designed in the spirit of Universities and Hospitals Affect distributing benefits and risks equitably, Metropolitan Economies, Washington, these partnerships can make tremendous D.C., Brookings Institute. contributions to human development and De la Torre, Augusto, Eduardo Levy Yeyati local capacity building. Most of the and Samuel Pienknagura (2013), “LatinAm challenges for developing new ericaandtheCaribbeanasTailwindsRecede partnerships of this kind can be resolved :InSearchofHigherGrowth”, LAC by developing shared frameworks Semiannual Report, World Bank, between universities and government Washington, D.C. partners on potentially controversial legal issues. Cornell’s Office of the Vice- Devol, Ross (1999), America’s High-Tech Provost for International Affairs and Economy: Growth, Development, and Cornell University counsel have Risks for Metropolitan Areas, Santa developed a range of useful resources for Monica, Milken Institute. understanding academic concerns Lennox, L. (2013), “CIPA Spring News regarding the risks of these partnerships: Letter” [online] http://www.cipanewsletter. http://www.international.cornell.edu/ com/cipa-forges-historic-agreement-with- international-agreements. Online resource panama/. gateways can promote best practices and common legal frameworks, and Martinelli, Ricardo (2013), Development in counterparts can sponsor local or Panama, CIPA Colloquium, Ithaca, NY regional conferences to provide academic [online] www.cornell.edu/video/panama- administrators and government president-ricardo-martinelli-at-cornell. counterparts the opportunity to network Martinelli, Ricardo (2013), “Round Table and deepen relationships. Cornell Program Infrastructure Policy”. Since the availability of funding is Mattson, S. and A. Teran (2011), inconsistent across universities and “Education trap threatens Panama’s governments, counterparts should economic boom”, Reuters [online] www. actively solicit co-investment from private reuters.com/article/2011/09/06/us- donors. The next development in this type panama-education- of PPP might be a triangulated model, idUSTRE7857D420110906. with students jointly sponsored by government, the private sector and Roy, Roberto (2013), Round Table universities. Furthermore, government Discussion on Infrastructure with Cornell stakeholders should think strategically Faculty, Panama Presidential Palace, about their investment in these Panama City. partnerships to ensure high return. For Shaffer, David and David J. Wright (2010), example, counterparts might make How Higher Education Institutions are funding conditional on the student Working to Revitalize Their Regional and returning to their native country (to prevent State Economies, Albany, Rockefeller human capital flight). Above all, this model Institute. requires an entrepreneurial spirit and comprehensive buy-in among Skorton, David (2008), “Higher Education: stakeholders to overcome the often One of the U.S.’s Strongest Diplomatic significant bureaucratic and logistical Assets,” Cornell Alumni Magazine. obstacles to partnership. Trani, Eugene (2010), The Indispensible Keywords/tags: Education, higher University, Lanham, Rowman & Littlefield. education, Panama, human capacity building, workforce development, public-private partnership

36 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America of 5 December 2007, which was passed The Uruguayan health system underwent Case 7. Digital as a result of this reform, seeks to foster major reforms in terms of its design and equitable access to health services and to financing arrangements, and FEMI, which Health Project of modify the model of attention. It applies found itself facing new demands for primary care strategies by prioritizing the information for management purposes, the Federation of needs and rights of citizens, with special has had to adapt to these changes. The emphasis on the development of care FEMI digital health (FSD) project is part of Internal Medicine behaviours and social participation45. its response to the need for clinical and epidemiological information and its (FEMI) FEMI has had to adapt to and align itself members’ requirements for new with the changes proposed by the new instruments, measures to promote good SNIS. One of the requirements laid down health and preventative targets. The most by the health authorities was that the important tool for improving the A public-private integration experiment in different healthcare institutions should comprehensive care and management the health sector provide health, clinical and epidemiologi- process has been the implementation of cal information relating to users. The the electronic clinical record in its changes that will be ushered in by the institutions. This is expected to have Executive Summary series of demographic, epidemiological benefits in terms of care provision for and economic developments will make users and to improve institutional and This nationwide experiment aims to ICTs a fundamental tool not only for federal management. To this end, the develop and implement instruments using generating information but also for following objectives have been defined: information and communication evaluating health systems, both public and technologies (ICTs) to improve the private. Developing and implementing -- Provide support and mechanisms for efficiency and productivity of institutions ICTs for the management of health participation in the local data- belonging to the Social Health Insurance institutions will be crucial in overcoming processing initiatives of each institution System of the Federation of Internal the shortage of accurate clinical and -- Contribute to the preparation of human Medicine (FEMI) and public hospitals of epidemiological information relating to the resources through face-to-face and the Public Health Services Administration patient population. The FEMI Digital Health online courses taught by national and (ASSE). It was developed as part of the Project, which encompasses the FEMI foreign teachers Inter-American Development Bank institutions and ASSE hospitals, seeks to Multilateral Investment Fund project provide the requisite tools to improve the -- Participate actively in setting national entitled “Improving management and overall management of the institutions and standards, with the involvement of the productivity in the health system in enhance the quality and security of Office of the President and various Uruguay”. medical care for the benefit of users. technical committees in the Uruguayan Society for Standardization, Exchange This project is supported by contributions and Integration of Health Services Data from the FEMI Management Committee, and Information (SUEIDISS)46 Description whose core objective was to launch a -- Establish a strategic partnership with The development of the Uruguayan health reform process involving the establish- the Uruguayan Health Information market is contingent on improvements to ment of a comprehensive, nationwide Society (SUIS) to hold the first the management processes of service enterprise to standardize practices and introductory course in medical providers and more widespread use of strengthen the unity of the system without data-processing for FEMI medical and information systems to enhance the sacrificing decentralized administration or computer technicians, with the support efficiency and quality of the services autonomous management. The proposal of the International Medical Informatics provided and the information needed to and design of new management tools to Association (IMIA) improve healthcare and clinical improve the effectiveness, efficiency and management. The above-mentioned quality entailed running an initial phase to -- Forge partnerships for collaboration integration refers to the pooling and joint analyse the situation with reference to its with foreign institutions that use digital organization of resources to provide structural factors. The objective of the tools to boost management and services. In terms of the health sector, FEMI Digital Health Project is to enhance medical knowledge integration relates to each of the essential management efficiency and foster -- Participate actively by providing components of the health systems, i.e. the integration between the institutions that technicians and knowledge in digital population and institutions. A number of make up the FEMI network, by developing development in various forums and instances of the public and private sectors and implementing ICT-based instruments, committees, together with the Ministry complementing one another have been such as the electronic clinical record of Public Health, the Electronic observed are and still ongoing, especially (HCE), the telemedicine network and a Government and Information Society in the interior of the country. These have balanced scorecard. Under the pro- Agency (AGESIC), the National been based largely on a degree of gramme agreement, documented in the Resource Fund (FNR) and FEMI goodwill, prestige and interpersonal donors’ memorandum, two public executing units relationships and will serve as a basis for hospitals that fall within the sphere of ASSE have been incorporated into the formal integration. A reform of the health -- If expansive telemedicine programmes FEMI experiment. A service contract has system was launched in Uruguay in 2005 such as this one are to succeed, been signed with these hospitals in which and will involve changes in models of access to the enhanced computing FEMI, through its project executing unit, medical attention, management and power of the cloud must not be limited will have to decide on the implementation financing. The National Integrated Health by data location requirements System (SNIS), established by Law 18.211 of the different solutions in the two hospitals.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 37 Achieving these goals will facilitate Innovative public-private partnership basis and are grouped into a federation coordination of the FSD project with the (PPP) model that is governed autonomously with different public and private stakeholders geographical decentralization of the The project provides for the implementa- involved in electronic health initiatives in executing units across the country. tion of three information systems in the Uruguay. This initiative is therefore aligned FEMI care network: the telemedicine The vision of reform process is to integrate with one of the main pillars of the health network and balanced scorecard (for all the two systems gradually, with a closer, reform system: complementarity and FEMI institutions) and the electronic clinical more complementary relationship and integration of services. record in the emergency, epicrisis and with the community, education centres Uruguay currently has a population of outpatients departments of five FEMI and non-governmental organizations. 3,286,314, of whom 40% live in the capital institutions and two ASSE hospitals. Competition for customers will be on the Montevideo and 60% in the interior. The Capacity building will be carried out at both basis of adjustments and mutual benefits, National Integrated Health System of ASSE and FEMI to provide operational which will improve, through concerted Uruguay is made up of subsectors support to the units set up during the actions, social solidarity and the comprising service providers from the functioning phase and to integrate the rest responsibility of the system in terms of public and private sectors. The network of of the executing units that did not take part providing healthcare. the Public Health Services Administration in the pilot experiment into the system. (ASSE) is the principal public entity in the Implementation strategy The electronic clinical record system country and comprises hospitals, health generates data that serve as inputs for The use of new information tools, among centres and polyclinics. It provides health administrative and clinical management. them the electronic clinical record, services for a population of 1,192,580, or The care facilities in administrative centres modifies the current clinical care approximately 36% of the total population. in the rural interior and in core centres in processes and in many cases involves a The private sector includes non-profit other rural areas will share human, reengineering of processes that is not organizations, with 47 comprehensive physical and technological resources so expected to complicate medical prepaid healthcare providers, 12 of which that the clinical records will be maintained procedures. Experience in this regard have their headquarters in Montevideo in a standardized, user-friendly way. suggests that when such projects fail, it is and the rest in the interior. Twenty-three usually because health professionals belong to FEMI, which has 800,000 users Since national integrated health system refuse to adopt the tools or because the or 25% of the population of the interior, users can, voluntarily or depending on the institutional guidelines are too weak to who are served by a network of 34 social insurance system, participate in the push through the necessary change. general hospitals, 87 polyclinics and a system in a variable or ad hoc manner, referral centre in Montevideo, which they will have a unified electronic health To address this issue, the FSD Project caters for more complex diseases. record belonging to them in any hired a consultancy to outline the strategy eventuality. This will enable analysis of for implementing the change, define the Currently, FEMI has eight institutions that epidemiological indicators or indicators of organizational context in which the project use electronic clinical records in the areas the provision of services and costs would be developed, detect strengths of emergency care, epicrisis and relating to the same population or and possible interferences or obstacles, outpatients services, and two public geographical area. This is innovative since identify appropriate components for use hospitals that use them to provide there are currently at least two different in handling the change, and prepare emergency services. The entire care staff large-scale data systems used in the guidelines for communication and human of the 10 emergency services were public and private sectors, without management of the change. In light of trained to use them, and two months after mentioning public and private sub- these recommendations, a the system was set up in the emergency systems that are not covered by this multidisciplinary team was formed with facilities, it had met the approval of 80% of initiative. members of ASSE and FEMI and the senior care staff. Furthermore, a user technological partner. This team included survey of the electronic clinical record The institutions involved are, on the one members with different profiles: health system showed that 87% of the 143 hand, public hospitals, that essentially managers with decision-making power; doctors and nurses surveyed responded provide state-financed, hospitalized technical directors; doctors; computer that they were satisfied or very satisfied. healthcare and are open to the general programmers; project directors; medical public without discrimination. They record experts; and development and operate as a social, solidarity-based implementation teams that used public service and include training recognized project management services at the Faculty of Medicine of methodologies to carry out the survey Uruguay, and have the same exercises of the care processes, adapted characteristics as hospitals elsewhere in the systems to the processes in question, Latin America. The FEMI institutions, on validated progress and initial production the other hand, trace their origins to the methods, and provided training in the use medical unions of the country’s interior of the systems to training staff, end users and have been developed over the past and first-level medical staff. 60 years. FEMI health centres provide hospitalization and outpatients’ services and are funded by more than 70% by the national integrated health system. They are comparable to social security systems regulated by sectoral laws and agreements signed with the state. All these institutions operate on a non-profit

38 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Financing is provided within the Key Success Factors Sustainability factors framework of the project through locally Sustainability is understood to be the generated funds of the 23 FEMI member Success will depend on whether capacity to continue providing services institutions and non-refundable loan funds technology that may be effective in other and initiatives generated under the FEMI from the IDB Multilateral Investment Fund sectors of the society proves efficient and Digital Health Project after the support (MIF). The operation amounted to US$ 3 effective in the health sector, and provided by FOMIN/IDB comes to an end. million, financed on an equal basis by the particularly in emergency services. The project design provides for the two entities. Once the electronic clinical The effectiveness of the proposal is continuity and maintenance of a coordina- record provider had been selected, contingent on, among other things, its tion unit, wholly financed by the central- through an international public invitation to acceptance by the health system and ized FEMI office, as a benchmark for the tender, and once the agreement for society, and on its impact on social maintenance and future development of installation in the two public hospitals had well-being based on knowledge of actual this new technology. This unit will provide been signed, the latter pledged to provide production and consumption of services, planning, evaluation and security functions US$ 150,000 in kind. These contributions costs and the epidemiological map. Given and will also be responsible for selecting translate into man-hours of the medical that, on average, 25% of daily and including those standards that allow and technical staff tasked with analysing consultations in the system are with the for maintenance of integration through care processes, adapting the original emergency services, the information interoperability and medical terminology. systems to make them compatible with provided is significant for setting priorities the electronic clinical record, validating the In this regard, the focus should be on and earmarking resources. This electronic clinical record system, training building technical, institutional and undertaking may be expected to be trainers and end users, and providing financial capacities and on coordinating effective provided that this finding can be first- level support for medical staff. networks to give continuity to the integrated into clinical and administrative However, no account was taken of the processes and maintain existing benefits. management and that this knowledge hospitals’ requirements to adapt their enables improvement in the quality of care The project’s legal viability and expansion facilities to accommodate rented and the security of the patient at a are governed by the regulatory framework infrastructure and to install networks, reasonable or sustainable cost. existing in the country. Thus, a legal equipment or cables; the total estimated framework must be developed to provide contribution in kind for this project will, in The technology selected is sufficiently guarantees and safeguard the rights of fact, be twice as high. flexible, globally acceptable and should citizens and establish clear rules in the prove to be sustainable over time. relations between the different social Acceptance by users is linked to the Results, Outcomes and actors. This framework includes Decree academic training mechanisms that can No 396/03 of September 2003, which Impact be put in place to help train health deems the electronic clinical record to be professionals. The FEMI Digital Health valid in legal medical terms; Law 18.331 or Multidisciplinary teams made up of Project (PFSD) is currently developing a Protection of Personal Data and Habeas professionals and technical staff from 180-hour medical information diploma as Data Act, which recognizes the right to the both the public and private spheres have a pilot experiment for FEMI staff. A new protection of personal data; Law 18.600 of successfully been integrated. To date, the module open to members of both the September 2009, which recognizes the proposed objectives of setting up the public and private system is being admissibility and legal validity of the systems in the two public hospitals have proposed for the coming year with an electronic document and electronic been successfully met, as recognized by option to upgrade the diploma to a signature; and Article 72 of Law 17.930 the ASSE and MIF authorities. postgraduate diploma or a Master’s. establishing the Electronic Government The two organizations have decided to FEMI considers that the economic and Information Society Agency (AGESIC), extend the pilot experiment to their other support and knowledge transfer received which manages the national project institutions. FEMI is committed to from FOMIN/IDB, along with the actual referred to as Salud.uy, whose specific pursuing this project and is in the process project management, has been a key goals include the definition and introduc- of drawing up a sustainability plan. ASSE factor in the results obtained and brings tion of a single electronic clinical record. has presented an expansion project to the credibility and trustworthiness to the The economic and financial sustainability rest of its emergency services and is organizations (and related entities) that of this Electronic Clinical Record is confident that assistance and support will facilitate the promotion of the benefits of ensured by FEMI through the actual be forthcoming from MIF. this technological implementation and contributions of its institutions, plus 3% of If both of these expansion projects come organizational reform. the amount paid by the national health to fruition, emergency clinical records will fund to health service providers with ICT be successfully established at 57 hospital projects validated by the Ministry of facilities in the country, divided between Public Health. Under ASSE, a project Montevideo and the interior, covering with funding from FOMIN/IDB has been approximately 60% of the national approved for the extension of this population. experiment to the rest of the ASSE emergency network. A technical work team has been devel- oped with knowledge and skills and systematized, well-documented method- ologies. It applies best practices in the management of electronic health projects.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 39 Reproducibility in other countries -- Suppliers of reliable and secure systems that guarantee market The process followed during this project permanency should be selected. represents the most logical and most widely accepted course of action both Keywords/tags: Improvement of nationally and internationally, as reflected healthcare processes, connectivity, in international standards and best semantic and syntactic interoperability, practices of health project management. medical knowledge, quality, efficiency, This project requires a decision to be security, social responsibility, standards, taken at the government level regarding medical terminology use of these technologies, a conviction of the possible improvements ICTs could bring, and it must be technically feasible References given the communication networks and integration needs. Related websites / online material: Other experiences of innovative public- See [online] http://www.eclac.cl/socinfo/ private partnerships fostering the use of noticias/paginas/3/44733/newsletter12. ICTs in the health sector are related to the pdf development of telemedicine virtual networks47 in the region. These help to See [online] http://sos.ucv.ve/ and http:// broaden the coverage and quality of www.eclac.cl/publicaciones/xml/7/49897/ health and sanitary specialized SOSTelemedicinaVenezuela.pdf. knowledge as well as improve research See [online] http://www.sueiidiss.org and capacity building. Two examples are provided by the “Red Universitaria de Telemedicina (RUTE)” network in Brazil and the “SOS Telemedicina”48 network in the Bolivarian Republic of Venezuela, involving government authorities, public university hospitals and health centres, academic institutions and the private sector.

Policy Recommendations -- Analyse current or historical information systems and health records in epidemiological, demographic and economic terms and their cost, as measured by effectiveness, efficiency, quality and security indicators. -- Governments and public authorities need data, information and knowledge that enable them to prioritize health needs and allocate resources. -- Governments should assume responsibility for ICT governance and making the corresponding recommendations and regulations. -- Criteria used to select technology should be consistent with those used by academic bodies. -- ICT user training of a sufficient quality and quantity should be provided at different operative levels. -- The purposes of these technologies should be communicated to all levels. -- Long-term, sustainable financing should be secured in advance, since these are long-term projects.

40 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America vulnerable to earthquakes and other University of Central America, UCA) and a Case 8. natural disasters. Secondly, it is innovative local non-governmental foundation, the El because the Taishin model has been Salvador Foundation for Development Affordable developed by years of efforts to find and Dissemination of Housing affordable and locally available materials (FUNDASAL), have jointly developed and Earthquake- and construction design of houses for piloted earthquake-resistant construction low-income families by scientific and methods for social housing and compiled resistant Housing technological activities, using large scale manuals and drafted guidelines. seismic testing laboratories. And thirdly, while public institutions have established Innovative model of iPPP standards for earthquake-resistant Taishin is an innovative model, because Geographical scope: Central America houses based on scientific evidence, it is and the Caribbean first of all, technological innovation took innovative because private enterprises, place in that inexpensive and affordable convinced of the importance of the earthquake-resistant houses were Executive Summary resilience of low-income families, have designed using locally available low-cost actively participated in the spread of such materials and tested in large-scale Earthquake-resistant houses are essential houses. university laboratories. The following four for preventing tragedies caused by Taishin houses are among the most earthquakes. However, for these houses Description promising: houses made of reinforced to be introduced in slums and poor rural adobe (bricks baked at a low temperature, villages, innovative solutions are needed. Building earthquake-resistant houses is generally by the sun). This method is Inexpensive and easily accessible local one of the most important challenges for eco-friendly and labour-intensive and has materials have to be tested, together with countries vulnerable to natural disasters, the advantage of the local availability of the appropriate designs. The large-scale because low-income families of these the basic construction materials, although structure-testing laboratory of countries run the downside risk of losing the soil (clay) needed for this method is CENAPRED (Mexico’s National Centre for most of their savings when they are only available in certain regions. The the Prevention of Disasters) was used to affected by such natural disasters. The preparation of soil-based cement (baking) study the seismic behaviour of the frame Taishin project (a Japanese word meaning takes slightly more time than concrete and brick and adobe structures common “quake resistant”), or the project for blocks and block panel. Two other to Mexico, Central America and the “Enhancement of Technology for the methods, houses made of concrete Caribbean. Research was also conducted Construction of Popular Earthquake- blocks and of block panel, have the on work to repair and strengthen resistant Housing”, aimed at reducing the advantage of taking a shorter time to damaged buildings, on building disaster risk for residents in low-cost construct but are comparatively foundations and on soil composition. The social housing in El Salvador. Started in expensive. technology and innovative methods 2003, the project is a collaborative developed by CENAPRED were widely Second, an innovative public-private response by Mexico and Japan to help El partnership system was established. The used in the joint El Salvador-Japan- Salvador to recover and reconstruct the Mexico TAISHIN project, which promoted Vice-Ministry for Housing and Urban country from the aftermath of two Development is in charge of coordinating earthquake-resistant houses in El successive tragic earthquakes in 2001, Salvador from 2003 through 2012. the TAISHIN initiative and establishing which resulted in over 1,000 casualties official standards. A private sector According to a study on two major and caused extensive damage to association, the El Salvador Association of earthquakes that affected El Salvador in buildings, especially social housing for the Construction Industry (CASALCO) has 2001, 60% of the houses destroyed were low-income groups. According to a report participated, together with ASIA, in those of poor people (those whose by the Vice-Ministry of Housing and activities to foster the spread of income was less than twice the minimum Urban Development, 163,866 houses earthquake-resistant houses. Fundsal, an wage of the country). Low-cost houses (12% of the total number of houses in the NGO in legal terms but with strong private made of improved adobe, soil cement, country), were completely destroyed and sector involvement, is one of the key block panels and concrete blocks were 107,787 houses (8% of the total number of actors, producing and distributing therefore tested. The project also houses in the country) were partly or half construction materials in low-income established technological standards for destroyed. Of those who lost their houses, communities, in particular by providing earthquake-resistant houses and 60% lived on less than double of the reinforced adobe and block panels, which increased the capacity of the government national minimum wage. Public buildings are the most important materials in Taishin agency in charge of housing policy and were also affected, including half of the houses. Other NGOs, such as Caritas construction permits. An association of hospitals, one-third of the schools and and Habitat, participate by implementing private construction companies from El even the Office of the President. social housing projects. The two Salvador is currently participating in El Salvador was fortunate to be able to universities are in charge of research and efforts to make earthquake-resistant count on the assistance of a subregional development. houses more widespread. centre of excellence in disaster prevention, This initiative, El Salvador’s Taishin project, the National Centre for Disaster is regarded as innovative, firstly because it Prevention (CENAPRED) established in came up with a way to coordinate the 1990 in Mexico with Japanese efforts of public and private stakeholders cooperation. Through a tripartite as well as universities committed to partnership, major local stakeholders, making low-income families less including two universities (El Salvador University and Jose Simeon Canas

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 41 The Japanese government, through JICA, Furthermore, in collaboration with El shared experiences of recent tragic has facilitated this initiative throughout the Salvador’s “Chagas disease project” and earthquakes became an underlying process of formulation, execution and JICA, the TAISHIN project also introduced driving force in uniting them in this progress monitoring. It assisted partners the technique of mixing cement plaster triangular cooperation programme. In El in both managerial and financial aspects into adobe, which is effective in preventing Salvador, the aftermath of earthquakes of the initiative including the provision of the insect that spreads Chagas disease specifically highlighted the reality of necessary equipment and facilities for (the “kissing bug”) from encroaching into low-income groups residing in social or Taishin experiments, by sending experts the walls and floors of adobe houses. The self-constructed housing as the most from Mexico, Peru and Japan and inviting introduction of such an improved, yet affected population due to the inadequate Salvadorans for short-term training as well low-cost technique to make adobe construction methods used. as long-term fellowships. Partner building methods more earthquake- The need for the Taishin programme’s institutions in Japan include the Building resistant and repellent to insects is know-how was then stressed at the Research Institute, the International particularly beneficial for low-income emergency consultative group meeting for Institute of Seismology and Earthquake groups. Following the satisfactory results reconstruction, and repeated with the Engineering (IISEE). Some national of these pilot projects, manuals and formulation and launch of a national universities have also been engaged in the training materials on the quake-resistant development plan after the meeting. At programme with the provision of training construction methods were developed the meeting, donors including the IDB opportunities in Japan as well as the and distributed widely. Several training pledged support, which included policy fellowship opportunities in partnership events for their dissemination have also actions on housing issues with the with JICA. been organized. provision of temporary housing and other In addition, there were other notable related schemes such as special housing Results, Outcomes and achievements, which were not fully loans. The policy environment envisaged at the beginning of the project. surrounding this initiative was further Impact of the iPPP One such achievement was the consolidated by the formulation and organizational change in the management launch in 2004 of “Safe Country (2004- All planned activities for the transfer and of the housing sector. Partly inspired by 2009)” a coherent government adaption of Taishin assessment this tripartite programme, the Ministry of development plan, soon after the start of technology to the National University of El Housing and Urban Development’s Taishin. The plan clearly stressed the Salvador and the UCA have now been Bureau of Housing (VMVDU), the national importance of the role of the state in completed. These two universities are policy-maker in the housing sector, ensuring adequate access to houses for now capable of carrying out scientific voluntarily took the initiative to establish the people in low-income brackets. The seismic capacity assessments using the Department of Standard Formulation demand for Taishin know-how was also large-scale laboratory equipment and and Investigation (UNICONS) and the El evident among implementing facilities provided by Japan. As part of the Salvador Construction Institute (ISC), with organizations. One such indication was Taishin programme, in collaboration with a view to modernizing the country’s the construction of a building by the UCA, FUNDASAL, the two university construction industry. UNICONS is which could accommodate the facilities laboratories have already finished testing currently reviewing relevant regulations for the experiments using its own the four low-cost housing construction and drafting standards pertaining to the financing. In this case, Mexico played the methods. It is also noteworthy that in four construction methods. role of supplying knowledge to El 2012, both universities established a Salvador via CENAPRED, its national Master’s degree programme in disaster prevention centre. earthquake engineering, which takes Key Success Factors advantage of the capacity and expertise Sustainability factors the universities have built up through the The key factors behind notable Taishin initiative. Although the adoption of achievements of the Taishin initiative Earthquake-resistant low-cost housing these programmes is not wholly include: the strong demand for know-how based on the Taishin model is highly attributable to Taishin, this nevertheless matched by the provision of appropriate sustainable because committed public shows that the universities are now in a knowledge; the engagement of major key and private partners, together with position to offer such postgraduate stakeholders committed to the cause; universities and NGOs, are collaborating programmes in a field closely related to and institutional innovations for effective through an established institutional that in which Taishin provided its knowledge transfer and mutual learning. set-up. Furthermore, Taishin construction expertise. methods are now about to be enshrined The demand for know-how was matched as standards by Vice-Ministry for Housing Secondly, the project succeeded in by the timely and adequate provision of and Urbanization. Taishin’s commercial refining the four low-cost housing arrangements for exchanges of relevant sustainability is facilitated by these construction techniques to make them experience. The desire to acquire relevant standards and by the active participation more earthquake resistant. In knowledge on safe earthquake-resistant of private enterprises and, as mentioned collaboration with FUNDASAL, the project housing in the post-earthquake period in above, the association of the construction undertook an experimental housing the country was matched by the supply of industry. construction pilot project, based on the know-how and technology from Mexico refined quake-resistance methods. With and Japan. Prior to the earthquakes in El regard to the soil cement method – one of Salvador, Mexico had acquired and the four technologies appropriate for use adapted know-how from Japan over the in building low-cost housing – the project years, following its tragic earthquakes in improved the soil-based cement by the mid-1980s. In other words, the fact adding locally available volcanic ash. that all three countries in this initiative had

42 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Reproducibility in other countries affected families. This initiative deliberately Policy Recommendations placed emphasis on a participatory The following are some examples of approach involving affected families, local Some countries in Latin America have reproducibility in other countries. municipalities and private firms to shown themselves to be forerunners in -- Assistance to Nicaragua: From 2010, elaborate and carry out the recovery and devising solutions to such urgent issues the UCA and other El Salvadorian development plan aimed at reactivating as earthquake-resistant affordable organizations started to jointly host the local economy, and kick-started the housing for low-income families after specialist training programmes for the design and reconstruction of private years of effort. Innovative solutions, Nicaraguan counterparts on the housing. including know-how, technologies, and Taishin techniques as part of the good practice cannot be achieved Its socially innovative features rely on the ongoing project in Nicaragua for the overnight. Moreover, such knowledge is following factors: improvement of earthquake-resistant not available in traditional donor countries. housing construction technologies. -- A decentralized and participatory On the other hand, many of the innovative process for the design, organization -- Assistance to the Dominican Republic solutions should be based on both and implementation of the and Haiti: A special seminar was academic research and experience of reconstruction through 22 working organized in the Dominican Republic in practical application for dissemination. groups, directly placing the affected March 2011 to disseminate the El This process could be facilitated by an families at the centre of the process Salvadorian experience to innovative partnership among public and and involving municipal government counterparts of the Dominican private actors as explained above. This representatives and local firms for the Republic as well as Haiti, which were type of innovative public-private supply of material (logging, hardware affected by an earthquake in January partnership should be encouraged by store, roofs, etc.) 2010. public policies. -- Fine-tuned emergency housing using Keywords/tags: Low-cost earthquake high-quality construction materials to resistant housing affordable for low- ensure sustainability and safeguard income families, reinforced adobe, soil people’s livelihoods (resistance, Multistakeholder PPP for cement, Chagas disease, resilience, ventilation, space); they were adapted South-South/triangular cooperation, Post-Earthquake Emer- to family requirements through the public-private partnership gency Reconstruction and participation of families in both the Economic Reactivation in design and the building of their homes at a reasonable cost Chile References -- An immediate impact to kick-start local Hosono, Akio (2013), “Scaling Up In the immediate aftermath of the economic recovery with the South-South Cooperation through earthquake that struck south-central Chile development of eight plans for job Triangular Cooperation: The Japanese on 27 February 2010, a successful creation to involve affected inhabitants Experience”, Getting to Scale for Billions innovative PPP was set up for an in the productive process – thus also of Poor, Chandy Laurence, Akio Hosono, emergency economic reactivation and implying direct impact on their income Homi Karas and Johannes Linn, housing reconstruction programme in the – and by relying on four locally Brookings Institution. Maule and Bio-Bio regions. It involved a developed community “building broad range of actors that teamed up in a factories” and local private firms related IDB (Inter-American Development Bank) flexible and efficient ecosystem, including to construction; the systematic use of (2001), Poverty Reduction and Promotion the United Nations, as a multilateral donor monitoring and evaluation practices of Social Equity: Report on Activities in the organization, through its International with stakeholders and beneficiaries year 2000 and An Action Plan in the Areas Organization for Migration (IOM) in Chile; of Special Emphasis, Washington, D.C. -- The initiative enabled the construction representations of the Government of of 1,472 houses of 30 m2 and may JICA (Japan International Cooperation Chile at the national, regional and local provide a positive example of Agency) (2009), “Proyecto TAISHIN: levels; two NGOs; families and individuals sustainability and replicability in the Informe Final de Proyecto Mejoramiento affected by the loss of their housing and post-natural disaster reconstruction de la Tecnología para la Construcción y jobs; and various private local firms related and recovery process in the region and Difusión de la Vivienda Popular Sismo- to the housing and construction sector. beyond Resistente Taishin”. After the earthquake, the United Nations Source: AVINA. Saito, Shinobu (2012), “The Taishin quickly made a call for projects to be Triangular Initiative in Central America: financed by its Central Emergency Co-creating Quake-Resistant Response Fund (CERF), a humanitarian fund established by the UN General Construction Methods for Popular Assembly in 2006 to enable more timely Low-Cost Housing”, Scaling Up South- and reliable humanitarian assistance to South and Triangular Cooperation, those affected by natural disasters and Hiroshi Kato (ed.). armed conflicts, managed by the IOM in Chile. In this framework, Fundación AVINA and Fundación Proyecto Propio, two NGOs, devised an inclusive local development recovery and reconstruction plan aimed at providing housing to

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 43 Description trees and forest”, on the other, are major Case 9. challenges in the Amazon rainforest. Tropical rain forests, a “natural asset”, are Agroforestry in extremely important for safeguarding the Innovative model of iPPP the Amazon environment and ecology. They are rich in In the Tome Acu model, a combination of biodiversity and function as huge reser- crops and trees and the sequence for Rainforest voirs of carbon dioxide, but are now planting them are key. For example, cacao endangered. Indeed, significant losses needs 40% shade, so banana trees are its have already occurred worldwide. The ideal neighbour because they grow faster challenges are at least threefold: illegal than cacao and provide protection from logging needs to be stopped to avoid any Geographical scope: Amazon rainforest direct sunlight, heavy rain and strong further destruction of the rain forests, wind. Between the rows of banana and in Brazil and other Amazon basin sustainable and inclusive agroforestry countries cacao, at 24-metre intervals, tabereba needs to be introduced and established (Spondias mombin) fruit trees, acai palm Thematic area: Sustainable and inclusive and the lost forest needs to be regener- trees, and/or mahogany can be planted. development ated. Brazil’s forest area is 520 million Among these tree species, corn and rice hectares, where the primary forested area can also be planted. When planting is estimated to be approximately 490 diversified species, it is necessary to take Executive Summary million hectares, with 360 million hectares special care to ensure that the spacing in the Amazon region, making Brazil the between the different species is An ecologically friendly agroforestry country with the largest rain forests in the appropriate. Perennial and arboreal programme in the eastern Amazon world. At the same time, Brazil is also the species tend to compete for space to rainforest with its focal point in Tome Acu, country suffering from the worst defor- grow. Some consume a lot of water while state of Para, Brazil, has improved the estation in the world. others need more fertilizer. Michinori livelihoods of farmers and alleviated Konagano, a leading figure in Tome Acu poverty through the increased production One of the main turning points in Brazilian Multipurpose Agricultural Cooperative of foods and other crops. The renowned environmental policy was the incorpora- (CAMTA), who has greatly contributed to “Tome Acu model” received the first tion of environmental issues into the new the development of the Tome Acu model, regional development award (first “Brazil federal constitution drafted in 1988. In has devised a long-term cultivation plan, Regional Development Contribution” Prize 2003, the “Action Plan for Protection and featuring crop species that are all from the Federal Government of Brazil) Control of Deforestation in the Amazon economically reliable.51 In this way, the from President Lula da Silva. The model is (PPCDAM)” was drawn up as a major Tome Acu agroforestry model provides for based on an innovative combination of policy and action plan. It aimed to reduce a succession of productive plants, crops and trees and the sequence of the rate of deforestation the Amazon by providing farmers with steady annual planting them. It is regarded as innovative setting up a partnership between federal income. Which species are planted and firstly because it came up with a way to organizations, state governments, and when depends on the farm and the ensure the coordinated succession of citizens groups. Thanks to this policy and farmer. Factors affecting the decision productive plants and trees in such a way the related efforts, illegal deforestation has include location, soil condition, water that the amount of water and nutrients been decreasing, reaching its lowest ever availability, management efficiency and absorbed by different kinds of plants and point from 2009 to 2011 in the Amazon 50 the optimum harvesting period. trees is automatically adjusted to an rain forest. optimal level, that shade created by taller However, major progress has been made In 2004, a local municipal office, CAMTA, plants protects smaller plants, and that on the other two aforementioned chal- Embrapa Eastern Amazon, the poverty crops provide farmers a steady annual lenges. Agroforestry has been a key to this and environment in the Amazon income. Secondly, it is innovative because progress. In the mid-1990s, when forest programme (POEMA, carried out by a this model was developed by years of clearing sharply increased in the Amazon, local NGO, POEMAR) and JICA together efforts of the farmers of an agricultural agroforestry was often perceived as a way launched a project in Tome Acu to cooperative of the region and supported to slow deforestation by breaking the establish an agroforestry training centre by scientific and technological activities of predominant slash-and-burn cycle for young owners of small family farms. In the Brazilian Agricultural Research practised by most farmers in the region. 2005, Sambazon, a US-based customer Corporation (EMBRAPA), through its (Smith, Nigel and others, 1998, p. 1) of CAMTA, facilitated organic certification eastern Amazon branch. Thirdly, it is Shifting agriculture was thought to account of acai products, which in turn led to innovative because private enterprises, for about one-third of deforestation in doubling the capacity of the cooperative’s convinced of the importance of the Amazonia, while cattle ranching was fruit juice factory, and it encouraged tropical rainforest agroforestry, actively responsible for at least half of the forest CAMTA to disseminate agroforestry participated in the processing and retreat in those years (Serrao and others, techniques among small family farmers of marketing of products of the region.49 1996, cited by Smith and others, 1998). It the region, teach them how to organize often happens that after some years of marketing cooperatives and buy products using illegally deforested land as pasture from these cooperatives for processing at for cattle ranching and for other purposes, the CAMTA juice factory. (Yamada, M. and the devastated land, no longer fertile, is H. M. L. Osaqui, 2006, p. 315). abandoned. Therefore, the establishment Partnerships with private enterprises have of sustainable and inclusive agroforestry been widely developed. For example, in for small farmers on the one hand, and the March 2011, Meiji Seika Co. launched a regeneration of abandoned land, also by product called “agroforestry chocolate” agroforestry, “an agriculture that cultivates processed from Tome Acu cocoa beans.

44 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Fruta-fruta Co. has been selling 12 Sustainability factors private actors as explained above. This different kinds of tropical fruit juice in type of innovative public-private Agroforestry based on the Tome Acu affiliated shops in Tokyo since 2002. partnership should be encouraged by model is highly environmentally Brazil’s largest cosmetics company, public policies. sustainable as a result of its innovative Natura, has been providing financial and model developed over years of efforts by Keywords/tags: Agroforestry, Amazon, technological support to foster the spread farmers with the scientifically and rainforests, South-South/triangular of agroforestry techniques in Brazil and technological support of the national cooperation, public-private partnership other Amazon basin countries. agricultural research corporation, BMBRAPA. Its commercial sustainability Results, Outcomes and is facilitated by the organic certification, References and by private enterprises, as mentioned Hosono, Akio (2013), “Scaling Up Impact of the iPPP above. South-South Cooperation through The feasibility of the Tome Acu model was Triangular Cooperation: The Japanese Reproducibility in other countries confirmed by a study which has shown 25 Experience”, Getting to Scale: How to ha of agroforestry under this model yields The project is considered to be very easy Bring Development Solutions to Millions of the same income as 1,000 ha of cattle to replicate in other Amazon Basin Poor People, in Laurecne Chandy Akio ranching. The former therefore produces countries. This model has been shared Hosono, Homi Karas and Johannes Linn 40 times as much from 25 ha than the with various countries by means of (eds.), Brookings. latter from the same amount of land. South-South or triangular cooperation by Piekielek, Jessica (2010), “Cooperativism Moreover, the former creates jobs for 10 the Brazilian Cooperation Agency (ABC) and Agroforestry in the Eastern Amazon: to 20 workers with 25 ha while the latter and JICA. In 2006, JICA, along with The Case of Tome Acu”, Latin American needs 50 to 75 ha to create a job for one Embrapa eastern Amazon, launched the Perspectives 2010 37:12, SAGE. worker (Yamada, Masaaki 2003, p. 105). five-year third country training programme EMBRAPA Eastern Amazon has carried (TCTP) to host seminars to expand Smith, Nigel, Jean Dubois, Dean Current, out in-depth research on agroforestry.52 agroforestry skills to neighbouring Ernst Lutz and Charles Clement (2008), Economically viable species adapted to countries such as Bolivia, Colombia, Agroforestry Experiences in the Brazilian the local environment have been Ecuador, Peru and Venezuela. These Amazon: Constraints and Opportunities, developed and distributed to farmers. In seminars highlighted the Tome Acu model Washington, D.C., World Bank one of its recent research projects, and included a visit to agroforestry fields UNEP (United Nations Environment EMBRAPA Eastern Amazon found striking in Tome Acu. Based on the experience of Programme) (2011), Towards a Green similarities between the characteristics of this TCTP, in 2011 Brazil and Japan Economy: Pathways to Sustainable local “agroforest” soils and those of the launched a new TCTP programme Development and Poverty Eradication, natural forest soil of the Amazon rain entitled “international training course on Nairobi. forest. As such, agroforestry is helping the agroforestry systems technology” as part Amazon ecosystem to recover and of the five-year Japan-Brazil partnership Yamada, Masaaki (2003), “Amazon safeguarding farmers’ livelihoods. programme (JBPP). In the northern tropical rain forest and agroforestry”, regions of Bolivia, where the rate of Geography (June 2007) (in Japanese) poverty is high, a project to increase the Yamada, M. and H.M.L. Osaqui (2006), Key Success Factors added value of farming products is being “The Role of Homegardens in carried out by Bolivia, Brazil and Japan. In Key success factors appear to be the Agroforestry Development: Lessons from this project, Brazilian experts in development of innovative solutions, and Tome Acu, A Japanese Brazilian agroforestry are being sent to Bolivia to the provision of coordinated public and Settlement in the Amazon”, Tropical share agroforestry technologies and private support to farmers, especially Homegardens: A Time-Tested Example of practices, including those gained through through partnerships among the agricul- Sustainable Agroforestry, B.M. Kumar and the Tome Acu model.53 tural cooperatives, local government, P.K.R. Nair (eds.), Springer. EMBRAPA, local NGOs and private enterprises, as well as through the Policy Recommendations Related websites / online material: international cooperation of JICA. This has Related websitesjica-net.jica.go.jp/ led to a virtuous circle of rainforest Some countries in Latin America have lib2/07PRDM008 conservation through environmentally become forerunners in developing friendly agroforestry, the coordinated solutions to such urgent issues as the certification of agroforestry products and conservation of ecology and the their sale and marketing, and has environment after years of effort. improved the income and livelihoods of Innovative solutions, including know-how, farmers. Among other things, it should be technologies and good practices, cannot highlighted that the project promoted with be achieved overnight. Moreover, the partnership among local municipal relevant know-how is not available in offices, an agricultural cooperative traditional donor countries. On the other (CAMTA), Embrapa Eastern Amazon, hand, many of the innovative solutions POEMA and JICA, the organic certifica- should be based on both academic tion of products facilitated by SAMBA- research and experience of practical ZON, a US-based customer of CAMTA, application for dissemination. This and the active participation of private process could be facilitated by an enterprises in sales and marketing efforts. innovative partnership among public and

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 45 curtailed the overall development of major driving force for development in the Case 10. The Lambayeque. While the region as a whole region. This boost to the productive has social indicators that are close to the potential of the region, it is expected to Olmos Project national average, Lambayeque province, lead to greater employment opportunities where the project is located, is less well and increased demand for ancillary developed, with a poverty level of 52%, an services from the new contingent of illiteracy rate of 9.4% and an workers who either live already in the A comprehensive Model of Regional unemployment rate of 50%. region or will arrive to take advantage of Development the employment opportunities. In The economic potential of the region practice, an increase in the demand for came to light in the early 20th century. In Geographical scope: Latin America/ housing, utilities and other related 1924, the Olmos Project started as an Olmos, Lambayeque province, services are expected as a result of this irrigation scheme, with the goal of Lambayeque state, Peru transformation. channelling water from the Huancabamba Thematic area: Energy generation, River in the Atlantic basin towards the These changes are expected to bring employment, productivity, regional Pacific basin through a trans-Andean major improvements in social and development, poverty reduction tunnel intended to irrigate the lands of the economic indicators, such as a reduction Olmos region, and thus increasing the in the poverty levels, an increase in the agricultural output of the area. In later employment rate – and consequently in Executive Summary studies, a hydroelectric component was the household incomes – of large parts of added to the irrigation project and, more the population of the Lambayeque region. The Development Bank of Latin America recently, an urban development compo- (CAF) supports the sustainable The Olmos project is still ongoing. The nent was also included (see Diagram II.1). development of Latin American countries construction of the trans-Andean tunnel through a holistic approach integrating The Olmos Project started in the 1970s started on 2004 and was completed on different components so as to be able to with the construction of the trans-Andean July 2012. During this period, a dam was provide simultaneous support to several tunnel but ground to a halt owing to a lack also built to regulate the flow of the projects in different areas and thereby to of financial resources. The project was Huancabamba River. Work in preparation have a significant impact. In the Olmos resumed on July 2003, when the Olmos- for the construction of the hydroelectric Project, CAF has put in place an Tinajones special project (PEOT) was plant has not yet started, but the plant is approach to foster the development of a created as a decentralized body reporting likely to be completed within the next four poor region on Peru’s north coast through to the regional government of the state of years. Finally, the irrigation component of work in sectors such as irrigation, energy Lambayeque. The new objective of the the project, which started in September generation and agricultural businesses, project was to improve the quality of life 2012, is underway and is almost 50% complemented with an urban planning and the living conditions of the citizens of finished; completion is expected by model for a new city. The project includes Lambayeque, by virtue of the November 2014. a trans-Andean tunnel for which an opportunities that this new cluster of innovative financing scheme was agribusiness activities would create. The developed by CAF. The financing scheme creation of this cluster and the use of new has being planned and executed with the technologies were also expected to participation of the central government, increase agricultural output and lead to the regional government, private agricultural export activities becoming a companies, local authorities and citizens and CAF, as a multilateral development bank. The importance of their contribution to the Peruvian agribusiness industry is Diagram II.1 key to consolidating non-traditional export Agricultural Production Energy Generation Water Transfer sectors, increasing the quality of life of the region’s population and continuing to 38,000 Ha to be Hydroelectric Plant 1 Límon Dam (48m) generate skilled jobs. Incorpored to (404m free fall) agricultural production Trans-Andean Tunnel Hydroelectric Plant 2 (L:19.3km, D: 4.8m) The complexity of the project and 5,500 Ha of Old Valley (472m free fall) participation of the different actors has demanded their coordination requiring an innovative perspective. 1160m L: 3,71km 1104m Description L: 4,25km Presa Limón The Olmos region, in the Peruvian state of Rio Lambayeque, is an area with favourable Huancabamba climatic conditions for agricultural Rio Quebrada Túnel Trasandino production. It includes vast expanses of OLMOS Olmos Lajas land with high-quality soil. However, the region faces a reduced amount of yearly Valle Vieo seasonal rainfall which stops it for realizing y Tierras Nuveas its full agricultural potential. This water scarcity has shackled its economy and

46 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America This irrigation component will open up a efficient use of the money obtained in the The cost of the water transfer component new area of 38,000 hectares for agro- auction of the aforementioned of the Olmos Project totalled US$ 299 industrial activities and will improve 5,500 38,000-hectare area. The participation million, from which CAF financed US$ 50 hectares already in use by the rural and support of a multilateral organization million through a direct loan to CTO and community of Santo Domingo de Olmos. such as CAF – in close coordination with US$ 77 million through a co-financing The main value chains expected to benefit PROINVERSION, the Agency for the loan scheme with the Republic of Peru. from this project are: sugar cane (for the Promotion of Private Investments for Peru, The rest of the funding was obtained production of ethanol), asparagus, grapes as the governmental entity responsible for through equity contributions and a bond and citrus, while poultry and cattle milk the promotion of this PPP – was essential issue by the company, as well as a loan are also considered to be potentially to ensure that the project was feasible . from the Central Bank of Peru. However, benefitted. Furthermore, the project is the cost of the irrigation component is The main stakeholders involved in the also expected to attract new capital to the estimated to be US$ 258 million, with US$ iPPP are the national and regional area. This will eventually lead to the 128 million secured through the issuance governments, the private sector, the development and use of modern of bonds (supported by CAF with a partial multilateral financial system (through CAF), technological processes. guarantee of US$ 50 million), US$ 13 and farmers from the local community. million provided by contributions from the As already stated, the expected increase PEOT is at the head of the organizational shareholders of the company and US$ in the demand for labour will attract new structure, representing the regional 117 million obtained from the capacity workers and their families to the Olmos government of Lambayeque, and is payment (i.e. the fixed portion by way of area, leading to the creation of a new responsible for monitoring and right of use of the infrastructure to be urban centre. To address this situation, supervising the Olmos project. The built). In the case of this component, the the Peruvian Government, in association concessions are granted to private added benefit of State involvement was its with CAF, designed a comprehensive companies through public invitations to contribution related to the land´s public urban system for the new city – named tender which have the financial support of auction and that part of the funding was Charles Sutton, after the engineer who the national government and CAF. achieved through a bond issuance by the foresaw the project in 1920 – and is Once a concession is granted to a private concessionary backed by a partial intended to become a model for city company, it has the responsibility to carry guarantee. The grant component was planning in Peru. The design includes out and maintain work on the component promoted by Proinversión. urban development that will lead to a it was assigned by PEOT. The first transformation of production, component (water transfer) was granted environmental sustainability, institutional to Concesionaria Trasvase de Olmos Results, Outcomes and strengthening and public safety. (CTO) in 2004, which has been mandated Moreover, this city will host a research and Impact of the iPPP to operate the service for a period of 20 innovation centre for agricultural years and will charge a tariff for the The main objective of the Olmos Project is businesses, in an effort to promote transfer of water. The second component to reduce the poverty levels of the region technological development in a pivotal (energy generation) was granted to and to increase the quality of life of its sector for the Peruvian economy. Sinersa (Sindicato Energético SA) in 2010, inhabitants, through the creation of new which will operate the hydroelectric plant jobs and the establishment of a Innovative model of iPPP in perpetuity and will charge a tariff for the productive area. The projected entailed the development of sale of energy. The State will receive 4.7% Among the expected results and an agribusiness sector, as well as of the sales of Sinersa, resources that will outcomes of the iPPP, a key target is watershed management, energy be reinvested in the project. Finally, the growth in annual agricultural output of generation and irrigation in the third component (irrigation) was granted US$ 345 million, while the new land is Lambayeque region. The regional to H2Olmos (an Odebrecht company) in expected to generate US$ 1 billion-worth government of Lambayeque, through the 2010 to operate the service for a period of of total agricultural exports. This increase PEOT, and with the support of the national 25 years, in return for the right to charge a in the annual production will raise local government, encouraged the tariff for the irrigation service. The new public revenues by US$ 130 million, while development of the Olmos project lands to be irrigated by the project were national public revenues will increase by through an innovative public-private auctioned and sold in a public US$ 82 million. On the other hand, the partnership involving the granting of international auction to private companies project is expected to create 15,600 new self-sustaining concessions to private for a total of US$ 180 million under a jobs, of which 11,500 are direct jobs in the companies, which require no funding or concession to operate them in perpetuity. agricultural and agro-industrial sector, and guarantees from the Peruvian state. The Part of the earnings emanating from the 4,100 are indirect jobs related to urban concessions were granted for all the sale of the newly irrigated land will be services. The total number of inhabitants components of the project in a novel area deposited in the trust, and the rest will be of the new city is projected to be some such as irrigation. One of the most left for the concessionary. 62,500 by 2021, which will require the innovative aspects of this project was the construction of 21,000 new homes, 44 issuance of bonds for a greenfield initiative schools and five health centres. These with the guarantee of a multilateral new homes will generate an additional financial institution. It is also noteworthy US$ 4.2 million annually in municipal and that this project was the first of its type to property taxes. be financed in local currency and that it was considered for the project finance of the year award. Another feature of this iPPP is the creation of a trust, whose trustee is the PEOT, in order to ensure the

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 47 Key Success Factors Reproducibility in other countries The Olmos Project is an integrated effort One of the main key success factors of between different levels of government, the Olmos Project has been cooperation private companies, citizens and and coordination between the three levels multilateral organizations to achieve a of government – national, regional and social goal that will benefit a large amount local – that has enabled the creation of a of local people, but will also positively regional development strategy that is in impact the whole country. This kind of line with national interests. Additionally, irrigation projects with a national scope is the technical and financial support of CAF easily replicated in other countries, has been fundamental developing the especially those with similar conditions. various components of the project, from financial support for the water transfer The concession scheme for the entire component to technical studies for the project, with the support and supervision irrigation and urban plans. of the government, is also a noteworthy feature that is easy to replicate in other The social responsibility that has prevailed countries. Close cooperation between the throughout the project is another key public and the private sector can give rise success factor. The families that were to large-scale projects that in other affected in the first stages of the project circumstances are hard to develop. The were relocated to new areas with an incentives that are associated to the educational centre and complete housing concessions encourage the private sector modules with basic services. In addition, a to participate in this kind of project that, training programme was established for with the supervision of the public sector, young farmers that encompasses can have numerous positive results. management and modern irrigation systems, as well as new agricultural technologies. Finally, the farmers that Policy Recommendations currently live in the Olmos region will reap the benefits of the project with the -- To create a specialized institution construction of irrigation infrastructure at related to the promotion of private no cost; they will have to pay for only the investments in high-impact social water they use. Another success factor sectors was the development of a capital market by issuing local currency by means of an -- To promote and to establish a stable innovative structure. and reliable legal and regulatory framework Sustainability factors -- To establish the appropriate institutions to successfully carry out the PPP The scheme used in the innovative agenda public-private partnership of this project is self-sustaining. The concessions to the -- To promote independent and technical private companies require no direct professional regulators in the investment or guarantees from the institutions involved Peruvian state. However, the participation and coordination of the different actors -- To coordinate the different actors involved in the project have been key to its involved in the project success. Nonetheless, the Peruvian Keywords/tags: Irrigation, partnerships, government is working closely with the Proinversión Perú companies involved in the project, giving them technical advice and financial support in developing each of the components described above.

48 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Description the current Amazonian rainforest may Case 11. vanish. According to recent declara- Nicknamed “the lungs of the world” for its tions from the Brazilian Government, Multistakeholder contribution to breathable air through the rate of deforestation rose by 28% photosynthesis, the Amazonian biome is between 2012 and 2013, dramatically Partnerships for made up of diverse ecosystems including bucking the trend towards reduction in the Conservation rivers, lakes, jungles, forests and this rate between 2008 and 2011. grasslands. The immense and rich -- According to RAISG, the pressure on of the Amazon biodiversity of the Amazon was built up forests from infrastructure projects is over the course of millions of years, but increasing. Roads are being built Biome today it is on the brink of collapse. The across swathes of forest, providing rapid destruction of the tropical rainforest access for loggers, farmers, ranchers and degradation of its biodiversity have and land speculators to once-remote weakened the biome’s resilience to areas. Large areas of the Amazon have drought, fire and flooding at a time when Geographical scope: Amazon Biome, six also been granted for mining (52,000 temperatures are rising and climate mining areas covering 1.3 million km2) countries: Bolivia, Brazil, Colombia, change is accelerating. The threat to the Ecuador, Peru and Venezuela and oil and gas development (327 lots Amazon would become a direct threat to covering 1.1 million km2). Meanwhile, Thematic area: Sustainable the human race if this massive global some 246 dams, including 67 larger development, environment “lung” is lost. than 30 megawatts, are planned for Considered by many as a public good, a the region, threatening to choke off Executive Summary world heritage site from which all of rivers that play a key role in the mankind benefits, the Amazon biome Amazon’s ecosystem. The Skoll-Avina alliance contributes to nonetheless suffers as a result of the -- Considering Brazil’s influence on what efforts to conserve the Amazonian biome controversial uses it is put to. Mostly seen happens to the Amazon, it is important by bringing together local and regional as a wellspring of numerous natural to make a specific comment here. As actors and strengthening their efforts to resources and services, interactions we know, comprehensive governmen- mitigate climate change and ensure the between the biome and human beings tal policies and civil society actions sustainability of the ecosystem and the take on a different meaning for each of the initiated at 2004, and reinforced in quality of life of its inhabitants. Its goal is to different stakeholders of the region. Some 2007, have helped Brazil to consistently localize, strengthen and connect initiatives treat it as a matter of national sovereignty, reduce deforestation. This progress in to build a shared agenda and vision for development, endless resources, reducing deforestation, however, was the sustainability of the Amazonian biome. connection with the country and intercon- followed by a weakening of environ- Together with its allies, the alliance has nection between the Atlantic and Pacific mental protection regulations by been able to bring together scientists, oceans. Others see it as their own reducing the size or downgrading the business and political leaders, socio- territory, their way of life and their own type of protected areas, as well as environmental organizations and conception of “well-being”. The conflicts changes in the environmental crimes representatives of indigenous between stakeholders arise not only law and the forest code. These new communities to discuss and act on because of their different visions of policies and infrastructure investments, emerging trends in the pan-Amazonian development and conservation, but also combined with the incapacity of the area. The initiative has led to the because of the fears and prejudices of government to reorient investments development of joint actions based on a each of them, their obsessed-over “truths” towards sustainable activities in common vision of sustainable and confrontations between them. deforested areas are liable to make development that aspires to generate What is at stake is the Amazon itself. forests even more vulnerable. mechanisms for discussion and Social and environmental conflicts in the cooperation between civil society groups region over recent years have led to Innovative model of iPPP from the various countries of the region to thousands of deaths, the displacement of The Skoll-Avina alliance works at biome forge a common agenda that creates people, legal uncertainty in respect of shared, cross-border solutions. The level, with regional activities aimed at local investments and a weakened state. strengthening pan-Amazonian processes efforts undertaken highlight the Billions of dollars of investments have also interdependence of the countries of the and alliances, as well as local or subre- been paralysed owing to conflicts, illegal gional activities at the countries that region. The Skoll-Avina alliance has activities and a lack of governance. collaborated to create a culture of compose the biome: Bolivia, Brazil, sustainability by empowering indigenous, The context: Colombia, Ecuador, Peru and Venezuela. local and urban communities to monitor The Skoll-Avina alliance impact thesis is -- A recent analysis of deforestation at the composed of three interrelated fields of deforestation. It has also provided Amazon Basin carried out by the incentives to governments of the region to action: envisioning sustainability through RAISG network shows that between an effective pan-Amazonian platform of embrace international commitments to 2000 and 2010 an area equivalent to reduce greenhouse gas emissions. key players addressing social and environ- Great Britain (around 240,000 km2) was mental safeguards (PAN); informing destroyed. The “Amazon under decision-making with rigorous, independ- pressure” atlas warns that if the planned ent and timely data (FT) and transforming road projects (highways or combined Amazon development models by replicat- transport routes), oil and gas drilling, ing and scaling successful territorial mining and hydroelectric plants come to management experiences (TM). fruition in the near future, up to half of

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 49 To achieve these impact goals, favourable This initiative is supported by funding from hundreds of federal prosecutors, conditions were created so that diverse Fundación Avina and the Skoll municipal managers, university students, actors could together contribute towards Foundation, which signed an alliance rural labour unions, cooperatives and the common good of the Amazon, with a pledging to match one another’s funding NGOs. focus on collaborative processes. This on a 1:1 basis. In addition, Fundación In Brazil, the U$ 1 billion Amazon fund to strategy allows the building of a common Avina has a close relationship with other avoid deforestation has been set up, and vision for the future, looking for ways to foundations, and other organizations are Brazil’s voluntary commitment to binding positively influence decision-making to often called upon to pool their resources targets for emissions reductions has now create social changes. These changes with funds invested by the Skoll-Avina been enshrined in Brazilian law. Dozens of can be political, institutional, alliance. This underlying rationale of municipalities that formerly had poor track technological, scientific or cultural in aligning investments and leveraging records in terms of deforestation, such as nature and at a large scale. Leadership is partners’ strengths has attracted a Alta Floresta, are now using IMAZON’s essential to innovate processes, considerable amount of new resources in blueprint for green municipalities, recently innovation is essential to improve results support of the goal of holding the line on enacted in state law, with a view to and face adversity, and diversity is deforestation in the Amazon, allowing the complying with regulation and avoiding needed to integrate the majority of alliance to enhance its financial influence further government sanctions. In so postures. by a factor of five. doing, they are pioneering ways of The whole strategy is built considering all providing local development with the different stakeholders as essential to Results, Outcomes and minimum impact on forests. The Skoll- better address the challenges the Avina alliance has worked to disseminate Amazon biome faces. Each strategic line Impact of the iPPP this model in other similar initiatives of action and initiative combines different outside Brazil, such as in Bolivia, Ecuador, The RAISG network has consolidated its kinds of stakeholders, depending on the Colombia and Peru, which have their own capacity to independently map strategic intended results. specific characteristics, but follow the information on deforestation and other same logic as the green municipalities pressures on the nine-country Amazon. The Skoll-Avina alliance’s strategy is programme. chiefly implemented through Fundación RAISG provides strategic information, Avina’s local presence and network of which can be used by the hundreds of At regional level, Skoll-Avina’s allies have allies in all the countries listed above. members composing the Latin American negotiated with UNASUR/COSIPLAN to Fundación Avina has a history of almost network of environmental prosecutors to gain approval for the creation of the 20 years working with sustainable improve law enforcement, or by ARA Citizen Participation Forum. UNASUR has development in the Latin American region, (Articulación Regional Amazónica) also decided to hold a series of meetings which has helped it to build a network of members to advocate better policy- next year, the first of which will aim to set approximately 5,000 ally organizations. making. Some of this information is also out guidelines for citizens and hold a Considering only organizations that focus used by www.oecoamazonia.com, the debate to raise awareness on social and work on the Amazon biome, it has a first news media outlet in the region with actors information and participation network of 146 allies. By knowing the local the specific aim of using reporting to mechanisms. promote an un-fragmented, multi-country context and having close relationships ARA has grown to more than 50 vision of the Amazon simultaneously in with all the main stakeholders from each organizations, bringing together the most three languages. RAISG member country – from civil society, government or prominent national players concerned IMAZON has developed a geotechnology the private sector – a favourable with deforestation. It has mapped centre providing state-of-the-art environment for the construction of a Millennium Development Goals deforestation mapping training to collaborative process is fostered. throughout the Amazon, and involved the Amazon Cooperation Treaty Organization in publishing them. In Brazil, Forum Diagram II.2 : Skoll-Avina Alliance Stakeholders Amazônia Sustentável has now has 239 members from all sectors of society, and Latinamerican Network today is the main forum for discussing of Environmental Prosecutors development models in the Amazon. Both UNASUR/COSIPLAN Satellite Monitoring NGOs ARA and Forum Amazônia Sustentável bring together the most important Environmental networks for discussions on the Amazon Ministries RAISG – Amazon Network for Socioenvironmental as an integrated, interdependent biome, Georreferenced Data and on how to work collaboratively in ARA Regional – Civil PAN - FT – Forest Society Network focused safeguards Transparency order to hold the line on deforestation. International NGOs on a Pan-Amazon vision

Companies working at the Amazon Local NGOs TM – Territorial Management Other financing organizations Local Governments

Local Secretaries for Agribusiness Associations the Municipal Environment

50 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Key Success Factors Policy Recommendations -- Fundación Avina’s local presence Governments: means it is familiar with the local -- National legislation to punish those context and actors. responsible for deforestation by -- Its relevant network of quality allies blocking access to credit, and work at the local level in all pan- legislation to incentivize good forestry Amazon countries. practices and environmental services -- Its pan-Amazonian vision integrates -- Training for local staff responsible for countries and cultures. taxation of deforestation -- It promotes open dialogue between -- Legislation to guarantee social and actors. environmental safeguards for local people -- There is local government leadership and commitment to sustainable -- Rules for financial institutions regarding development. transparency and safeguards -- It involves the capacity of local Private sector: partners. -- Commitment to best practices at the -- There is trust and a common purpose Amazon biome among stakeholders. -- Commitment to work together with the -- There is donor proximity to local state and civil society to discuss and communities and openness to risk. better address the issue of deforestation Sustainability factors Keywords/tags: Conservation, Pan- Collaborative processes are built together Amazon, integration with civil society, the private sector and governments at local and regional levels. Its close relationship with other References organizations provides funding. The real commitment of the private sector, Amazonian Network of Georeferenced government and the civil society will Socio-Environmental Information (RAISG) ensure a reduction in deforestation. (2012), “Amazonia Under pressure”.

Reproducibility in other countries Related websites/online material The Amazon biome Strategy of the See [online] http://www.avina.net. Skoll-Avina alliance has been taught to See [online] http://www.raisg. make the most of the opportunities that socioambiental.org . arise from the Amazon countries regarding this biome. It therefore recognizes viable opportunities at pan-Amazonian level and tries to make them affect the whole biome. In other cases, it believes that it is important to recognize local opportunities that can be scaled, respecting each country’s specific characteristics and adapting best practices from one or another country to make them more suitable at the local level. It understands that the strategy can be replicated relatively easily, but participants must remain aware that each country has different legislation, cultures and institutional frameworks that need to be respected.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 51 In the area of international trade, Description Case 12. requirements such as carbon footprint measurement have a direct effect on The reduction of GHGs has been Inclusion of market access conditions with which enshrined by the UNFCCC and the exports from developing country must international community as a priority in Carbon Footprint comply. In the case of agrifood products, efforts to address climate change and of which many Latin American countries mitigate its impact. Various countries have Measurement in are net exporters, such requirements can progressively identified measures and translate into non-tariff barriers for their proposed targets for emission reductions, Export exports to industrialized countries. The in turn affecting production and dilemma for Latin American food consumption patterns. In parallel, Development exporters is therefore whether to be governments and firms – mostly in the reactive to these new requirements by industrialized world – are increasingly Strategies adapting to so-called “green establishing new requirements to protectionism” or to turn this agenda into measure GHG emissions related to the a positive one by attempting to redefine production and distribution of goods, to their business and export strategies and ensure their traceability and allow Geographical scope: Colombia, investing in patterns of production that are consumers to make more informed Ecuador, Dominican Republic, Nicaragua more sustainable and efficient both for purchasing decisions. Latin America and Thematic areas: Climate change, export business and the environment. the Caribbean is a relatively minor contributor to global GHG emissions: in development, sustainable patterns of Thanks to the establishment of public- 2008, Latin America and the Caribbean production in the agrifood sector private partnerships in specific agrifood accounted for 8.6% of the world’s sectors, various export industries in Latin population, 8.2% of global GDP and 12% America are currently increasing their of global GHG emissions. Although in Executive Summary ability to measure their carbon and absolute terms the region accounts for a environmental footprints and, more The reduction of greenhouse gas (GHG) small amount of emissions, on a per importantly, are beginning to increase emissions has been enshrined by the capita basis, the region contributes more their understanding of existing synergies United Nations Framework Conference GHG emissions than other developing between business competitiveness, on Climate Change (UNFCCC) and the countries, including China and India. In production efficiency and environmental international community as a priority in the region, emissions caused by changes sustainability. efforts to address climate change, in land use still represent a significant particularly global warming, and mitigate higher proportion in comparison with the its impact. In recent years, various Objective contribution of this sector in total countries have identified measures or emissions worldwide, but have declined proposed targets for emissions The objective is to strengthen the significantly in recent years. reductions. This, in turn, poses the capacities of public authorities and private challenge of adapting and “greening” The carbon footprint is an indicator of the stakeholders in the agrifood export amount of GHG generated and emitted production and consumption patterns in sectors to meet climate-change-related the context of new growth models that by a company or during a product’s life requirements, in particular the cycle throughout the production chain require greater sustainability and measurement of their “carbon footprints” inclusiveness. and, in some cases, its consumption, and “environmental footprints”, and turn recuperation and elimination. The carbon In parallel, governments and firms – them into an opportunity for making their footprint considers the six types of GHG mostly in the industrialized world – have business strategies more competitive and identified by the Kyoto protocol and is progressively established new environmentally sustainable. measured in ton equivalents in a common requirements to quantify GHG emissions related to the production and distribution of goods and services to ensure their Figure II.5 : Latin America and the Caribbean: Distribution of Sources of GHG traceability and inform consumers in this emissions, 2010 regard. Among those requirements, the (Percentages) measurement of the carbon “footprint” and the development – and potential 5% Agriculture harmonization in the European Union – of Industrial processes environmental labelling measures, are 24% becoming increasingly prevalent in some Fugitive emissions countries, particularly for agrifood Burning of other fuels products. This agenda and its implications 34% Transport for business are already well known in the 3% Manufacturing and construction countries of the Organisation for 3% Electricity Economic Co-operation and 4% Development (OECD) but less so in Bunker fuels developing countries. 1% 10% Land use and land use change 10% 6% Waste

Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.

52 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America unit. The measure of CO2 is obtained by More importantly, this requirement also -- Identify and disseminate good multiplying the emissions from each of the goes hand-in-hand with the growing practices related to environmental six gases by their respective potential to awareness among producers and footprints with a positive impact on global warming after 100 years. consumers of, and sensitivity to, the need export development along with to take into consideration their carbon contributing to environmental The measurement of the carbon “footprint” footprint in order not only to make their management and sustainability and the progressive development – and production patterns more efficient and potential harmonization in the European In each country, specific food sectors competitive but also to enhance their Union – of environmental-labelling likely to need to adjust their export business and environmental sustainability. measures are part of these requirements strategies to industrialized countries’ Various countries of Latin America which and becoming increasingly prevalent in market requirements were selected. are net food exporters therefore need to many countries, although still on a Private sector actors included chambers take account of these requirements and voluntary basis. In the area of international of commerce, business associations and incorporate them into their production and trade, such requirements have a direct private companies, whereas public actors export strategies to avoid facing entry effect on imported goods, which must included ministries and public institutions barriers to their exports and losing market comply with them in order to avoid loss of related to international trade, export share in these export destinations. market access. For food exporting promotion, and the environment, as well countries of the developing world, which is In sum, such an approach implies turning as academia. Partnerships between the the case of many Latin American coun- the above-mentioned issues into a private sector and public export tries, such requirements can translate into positive agenda in which both industrial- development agencies were seen as a non-tariff barriers for their products. ized and developing countries benefit from key element in achieving a common Various countries of Latin America which climate change-related concerns. In this understanding of climate change-related are net food exporters therefore need to framework, measuring and reducing the issues and requirements. The ECLAC take into account these requirements and carbon footprint associated with the project included capacity building on incorporate them into their production and processes of production and export of methodologies for measuring the carbon export strategies to avoid facing entry agrifood products should be seen as an footprint of food and agricultural products, barriers to their exports and losing market opportunity for exporting firms to improve and incorporation of these aspects into share in key export destinations. their image and avoid losing access to key export development strategies. destination markets on the one hand and The measurement of the carbon footprint The pivotal stakeholders involved in the identify and start addressing inefficiencies associated with the production and project are export promotion agencies, in their production processes and value distribution of goods and services has which are often public-private entities, chains on the other. The latter may imply been identified as a relevant indicator for bringing together export sectors from identifying quality and efficiency gains assessing contributions to climate change business with public authorities related to such as reducing energy consumption, through GHG emissions. It is also an international trade and export develop- optimizing logistics and distribution important indicator to inform consumers ment. An addition to these institutions, processes, and overall cost reductions whose awareness of climate change and of representatives from the private agrifood and improved competitiveness. the need to reduce carbon emission is an sector and the ministries of trade are often increasingly significant factor in the involved. In each country, a specific Characteristics of PPP selection of goods and services, mainly in public-private roundtable, coordinated by industrialized countries. Such requirements Over the 2012-2013 period, ECLAC the export promotion agency, was set up may progressively turn into non-tariff trade implemented the project, “strengthening to bring together these actors and barriers as goods and services with more capacities of governments and food promote long-term sustainability of the significant contributions to carbon emis- exporters to adapt to the requirement of national export promotion and interna- sions are likely to see their access to climate change” in collaboration with the tional trade strategies in the framework of industrialized markets limited. In some Development Account of the United the climate-change agenda. industrialized countries, various initiatives Nations. The Commission has worked To turn the climate change-related have already put in place environmental- closely with governments and representa- requirements into a positive agenda of labelling schemes informing on the carbon tives of food exporting sectors in Hondu- climate change, public and private actors footprint of goods and services. ras, Colombia, Ecuador, Nicaragua, Peru involved in export development have and the Dominican Republic to support the The agriculture and transport sectors placed emphasis on shifting towards the development of innovative public-private account for a significant share of following objectives: partnerships in the agrifood sectors to: emissions and are therefore likely to be -- To increase their knowledge of affected by climate change-related -- Enhance the capacities of actors to non-tariff environmental barriers to requirements and restrictions on imported measure and reduce the carbon food imports such as measurement of products. Given that Latin America is a footprint associated with their the carbon and environmental major provider of agrifood products to production patterns and value-chains footprints and traceability industrialized countries (more than 33% of -- Turn the climate change agenda into a US agricultural imports in 2011 and -- To incorporate and put into practice positive agenda for improving possibly up to 40% in 2013), measuring methodologies for measuring their competitiveness and business the carbon footprint is a key element of carbon and environmental footprint sustainability aimed at increased any export strategy in this sector to avoid measurement participation in global value chains facing the so-called “green protectionism” of industrialized countries. -- Adjust production patterns towards greater efficiency and environmental sustainability

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 53 -- To adapt their production patterns to -- Enabled dialogue and exchanges of -- Creating environmental or sectoral improve their international experiences have been held at ECLAC “labels” of sustainability and competitiveness and ensure sustained international seminars, bringing environmental management market access by complying with together experts and stakeholders -- Positioning brands internationally. import requirements and non-tariff from Latin America and other regions environmental barriers In each of the four countries, public- -- To rethink their production patterns to private roundtables and workshops have Results, Outcomes and enhance their business strategies and been established as the key institutional Impact of the iPPP contribution to sustainable mechanism to sustain dialogue, capacity management building and formulation of strategies. Private sector Table II.4 provides a summary of the From the environmental perspective, -- Positioning the issue of climate change actors involved in each country. these projects: -- Inclusion of environmental concerns in In each country, this public-private -- Can contribute directly to emissions business strategies roundtable conducted specific “case reduction studies” to measure the carbon footprint -- Capacity building for 800 private firms -- Serve as an incentive for the business of exported goods, either with external on climate change and exports; 55 sector to improve market access to resources or through self-funding companies were able to measure the export destinations and commit to arrangements. The development of carbon footprint of their export goods environmental protection public-private mechanisms in these areas and identify measures to adapt their has been instrumental in: production process in order to comply -- Increase competitiveness with export market requirements -- Measuring and reducing carbon -- Differentiate products footprints -- Strengthen industry associations The project has: -- Addressing and assessing -- Addressing environmental issues in -- Engaged in capacity building initiatives for environmental requirements in export collaboration with the public sector and government representatives and the destinations, identify joint strategies private sector on issues related to climate -- Improving the branding and corporate Public sector change and international trade, as well as image of specific companies and carbon footprint and food exports -- Placing the issue of carbon footprint on industries the policy agenda -- Promoted 55 carbon footprint case -- Identifying areas of inefficiency in the studies of nine export products in six -- Training for state institutions in production processes, supply chains, countries to serve as a benchmark for measuring the environmental footprint logistics and transportations, etc. public and private strategies related to and providing a comparative analysis carbon emissions and exports -- Identifying opportunities for increased of main export goods from the agrifood competitiveness of specific agrifood sectors: capacity building of 200 public -- Analysed and shared with the project’s products, officials on climate change and exports stakeholders 11 Latin American best- practice cases of public and private -- Making traceability progressively -- Identify structural issues related to the initiatives for dealing with carbon emis- compulsory production patterns that affect the sions; this study also examined two carbon footprint: energy mix, transport -- Fostering innovation best-practice cases from outside the and infrastructure, etc. region: the French environmental labelling -- Introducing other environment -- Improve collaboration and trust with pilot project (Grenelle Law) and a bench- management tools (e.g. water footprint) the private sector mark food industry initiative in Spain into agrifood sectors -- Identify areas of improvement for public policy in the area of trade and climate change

Table II.4 : Key Stakeholders and Sectors

Colombia Ecuador Nicaragua Dominican Republic Honduras Peru

Main food sector --Stevia --Shrimp palm oil --Coffee --Bananas --Palm oil --Citrus fruit --golden berry --cocoa --cocoa --asparagus Direct --ProExport (public) --CORPEI --CEI --CEI-RD --SNV --Promperu counterpart --(public-private) --(public-private) --(public) --(international --(public) development agency)

National --Ministry of --Ministry of --Ministry of Industry --National Council for --Ministry of Agriculture --Ministry of Trade and ministries and Environment and environment and Trade Climate Change --Ministry of Foreign Tourism other entities Sustainable --Ministry of Industry --Ministry of Energy Relations --Ministry of Development and Production and Mining Environment --Proecuador Private sector --ASOCOLFLORES --National Chamber of --ADOEXPO --ANDI --ADEX representatives --Bogota Chamber of Aquaculture --ADOBANANO Commerce --National Cocoa Commission

54 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Key Success Factors -- Disseminating information on environmental good practices and -- Common design and understanding of successful initiatives related to trade the “positive agenda” of climate and climate change change and the carbon footprint -- Having a third party (ECLAC) promote requirement the PPP as the modality to address -- Identification of key actors in the trade-related carbon footprint agrifood export sectors calculation and mitigation -- Common methodology and training -- Promoting the leading role of a national entity with both public and private -- A third party (ECLAC) promoted the stakeholders PPP as the way in which to address trade-related carbon footprint -- Considering the project outcome as calculation and mitigation relevant by both public and private partners -- Leading role of a national entity with both public and private stakeholders Keywords/tags: Carbon footprint, export development, climate change -- Project outcome was considered relevant by both public and private partners References Sustainability factors Frohmann, Alicia, Sebastián Herreros, Nanno Mulder and Ximena Olmos (2012), -- Relevance of climate change-related “Huella de carbono y exportaciones de issues in the public sector and alimentos. Guía práctica”, Project business associations Documents, No. 503 (LC/W.503), -- Leading role of a national entity with Santiago, Chile, ECLAC [online] www. both public and private stakeholders cepal.org/publicaciones/xml/2/48422/ Huelladecarbonoyexportaciones.pdf. -- Financial support of carbon reduction projects through public and private Frohmann, ALicia and Ximena Olmos funding (2013), “Huella de carbono, exportaciones y estrategias empresariales frente al Reproducibility in other countries and cambio climático”, Project Documents, sectors No. 559 (LC/W.559/Rev.1), Santiago, Chile, ECLAC [online] www.cepal.org/ -- Peru (cocoa, coffee) publicaciones/xml/5/51365/ -- Ecuador (cocoa, tuna, bananas) Huelladecarbono.pdf.

Related websites / online material Policy Recommendations See [online] http://www.cepal.org/ -- Providing incentives for enhancing the comercio measurement of the carbon footprint See [online] el Seminario Huella de and improving environmental carbono: http://www.eclac.org/cgi-bin/ management through tax, subsidies, getProd.asp?xml=/noticias/ regulation, local organization calendarioActividades/6/49346/P49346. -- Leading and disseminating pilot xml&xsl=/tpl/p43f.xsl&base=/ programmes for carbon footprint cooperacion/tpl/top-bottom.xsl measurement in key export sectors -- Mobilizing resources for international cooperation in the area of trade and climate change -- Articulating systematic public-private dialogues -- Leading the development of national emission factors and carbon calculators for the purpose of certifying companies measuring their carbon footprint

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 55 In the area of agricultural development, In Latin America, agricultural production Case 13. the availability of accurate and accounts for a significant share of GDP comparable weather data and indicators and various countries are also net food Enhancing the – such as on temperature or humidity – exporters. The region also includes and of related historical data sets is subregions that are among the most Production and particularly relevant for the assessment vulnerable in the world to extreme natural and forecasting of agricultural production. events. The countries of Central America Dissemination of Such figures are essential to analyse and the Caribbean basin are particularly changes in climate patterns, forecast vulnerable to hurricanes and tropical Weather-related future evolutions and assess their effects storms, but there are also areas at risk of on crops, soil and related agricultural flooding in other countries such as Indicators to variables. Argentina, Bolivia and Paraguay. Recent analysis by ECLAC shows that the Adapt Agricultural The occurrence and magnitude of occurrence of extreme natural events and extreme natural events related to weather the magnitude of related damage and Production to has also turned out to be an important losses has sharply increased over the factor in more recent years. Among its past decade. Moreover, there are Climate Change main recommendations on how to considerable differences between local address climate change, the and sub-national territories within single by Means of ICTs Intergovernmental Panel on Climate countries in respect of both climate Change has highlighted the importance of patterns and the availability of information early warning systems, the enhanced use and data. of ICTs, technology for the management Geographical scope: Chile, Colombia, of water resources, improvement and In the field of agriculture, given the Mexico preservation of natural resources, as well complexity of production systems and the as institutional innovation among which need to reduce the gap between global Thematic area: ICTs, agricultural the use of agrifood insurance schemes and local scales, it is particularly important production, climate change, food security and improvement of access to financing to analyse the impact of climate change in agriculture. and there are many relevant variables. Executive Summary Moreover, to properly address the The availability, production, processing complexity of climate change, producers and dissemination of statistics and Information and communication technolo- require data and indicators not only on the indicators are often a major hurdle in climate but also on biophysics and gies (ICTs) can make a powerful contribu- countries of the developing world in which tion to agricultural development, either socio-economic variables (such as water statistics in general and weather-related resources, biodiversity, productive through their application in virtually every data in particular may often be limited, sphere of agricultural production and farm infrastructure, institutional capacities, and inconsistent or lacking historical series. vulnerability levels of agrifood producers). management or by transforming production The following barriers and limitation and marketing and, even more importantly, traditionally characterize developing In Latin America, weather and climate- the flow of information and knowledge countries such as those of Latin America: related information is usually generated by within the sector. Additionally, they play a a lack of and/or integration of accurate a broad set of actors ranging from key role in adaptation to and mitigation of information and data regarding research institutes and academic centres, climate change related dimensions. The environment, climate and social areas; the public institutions, private service case described here displays various fact that the data production process has providers, as well as groups and unions of examples of how countries of the region, traditionally been top-down and geared agrifood producers. The provision of data through public-private partnerships and use by supply rather than demand; and the and indicators has traditionally been of ICTs, have enhanced the production and perception that the development of new guided by the requirements of research dissemination of weather-related data and information and data is of low added and data generation centres but these do indicators to improve the capacities of the value. not necessarily meet the exact information agrifood sectors to adapt their production needs of agricultural producers or are patterns to climate change. In the field of agriculture, given the delivered in a complex mode or with complexity of production systems and the inadequately processed data. The new need to reduce the gap between global opportunities offered by ICTs have Description and local scales, the analysis of the enabled wider dissemination of data but impact of climate change is particularly have not necessarily improved its quality, The United Nations Framework Confer- important and the amount of variables to ence on Climate Change (UNFCCC), the accuracy and relevance for the purposes consider very broad. Moreover, to of better forecasting a more efficient main multilateral body created to assess properly address the complexity of the dimension and impact of climate agricultural production process. These climate change, producers require data facts, together with the ever-increasing change, has placed early emphasis on and indicators not only related to climate the need for relevant and accurate need for more effective assessment of the but also on biophysics and socio- impact of climate change in agriculture, information, data and indicators regarding economic information (such as water climate variables in order to help policy- call for a better design, processing and resources, biodiversity, productive delivery of data and indicators as a strong makers and private sector actors make infrastructure, institutional capacities, well-informed decisions aimed at adapt- support tool to adjust agricultural vulnerability levels of agro-food producers, production patterns and environmental ing to the consequences and mitigating and so forth). the effects of climate change. management, particularly at the local and micro levels.

56 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America ECLAC has identified examples in which station registers information and data in stations, co-financed by the public countries of the region have set up real time on the following variables at the innovation fund CORFO. In 2009, it successful and innovative Public-Private local level: rain, temperature, humidity, launched a master plan to increase its Partnerships aimed at improving the solar radiation, wind speed and direction, scale and coverage with funding from production and dissemination of data and soil humidity. Based on this information, it Innova CORFO and the Agrarian indicators related to climate change with produces related indicators including Innovation Foundation (INIA-Chile) of the the support of ICTs. As described below, evapotranspiration, barometric pressure, Ministry of Agriculture of Chile which in Mexico, Chile and Colombia, different dew point and heat units and cold hours. helped it expand to 185 automatized actors have teamed up through innovative The system enables to access recent and stations and cover 95% of fruit production institutional arrangements in order to historical statistics as well as recent areas in the country. As in the previous enhance the generation and efficient cumulated and average data, maximum case, every five minutes stations register dissemination of accurate agro-weather and minimum figures, etc. and compile data and information on information to enhance the capacities of seven key parameters: temperature, In this scheme, the pivotal institution is the their agrifood producers. In each case, relative humidity, rain, atmospheric Fundación “PRODUCE”,54 a non-profit synergies have been identified among pressure, global radiation and wind speed organization grouping producers of the agriculture sector and related and direction. The information is agro-industrial and agrifood chains, which corporations, public authorities at the disseminated in real time and is made coordinates their work with that of national national and local levels, weather- available online and via GPS. The network and regional government authorities, forecasting, academic and research was designed to be a public good research centres, and specific sectoral institutions to turn these information providing free access to easily interpreted representatives. It places particular systems into a public good. The cases of data. It works through the ongoing emphasis on enhancing the use of new Chile and Mexico highlight the benefits of association of FDF, INIA-Chile and the technologies. Regarding the specific collaborative action between public and Chilean weather forecasting directorate network of agro-climate stations, it is private institutions in the generation of and currently has 235 automatic stations responsible for carrying out the following agro-weather information. In the case of transmitting information by GPRS, of actions: Colombia, it represents a consortium of which 91 are owned by agriculture institutions working in the field climate -- Maintenance and operation of the producers and agrifood companies. change with strong emphasis on network Inter-institutional network on climate information sharing and efficient use of -- Repairing or updating of stations change and food security in Colombia resources aiming at shared achievements. (RICCLISA) -- Training and capacity building of Innovative models of PPP technical personnel RICCLISA was founded in 2009 based on the recommendations of a national National network of state agro-climate -- Fund-raising and partnerships with workshop on climate and agrifood sectors stations in Mexico from states’ institutions held by the Ministry for Agriculture and Mexico and Central America have been -- User support (state governments, Rural Development with the participation increasingly vulnerable to the volatility of producers, agrifood groups) of more than 100 specialists and experts weather conditions and extreme natural from a broad range of public and private The network of climate stations currently events over the past decade which, in entities. Among the needs identified at the has 5,500 high-quality stations including turn, has implied a significant increase in workshop were the development of a complete data series, of which 3,500 the costs of loss and damage. In Mexico network aimed at reducing the existing report on daily basis to the National alone, the patterns of rain in different institutional vulnerability which resulted in Oceanic and Atmospheric Administration seasons have for instance evolved a lack of coordination between climate (NOAA). Regarding adaptation to climate dramatically: the autumn-winter cycle in programmes on the one hand and change and risk management, it has also 2010-2011 represented one of the worst agriculture-related policies and set up a catastrophic insurance system droughts in recent history which affected requirements on the other, along with the aimed at supporting the most vulnerable 800,000 hectares of cultivated land. The inefficient pooling of human, technical and and low-income producers in the case of drought of 2011 represented an historical financial resources, as well as isolated extreme natural disasters affecting record which affected 2.56 million acres, knowledge and use of data and agriculture. A federal subsidy accounts for led to a loss of 6 million tons of crops, and information. 75% to 90% of the insurance premium. caused dams and reserve utilities to Basic agriculture insurance aimed at Table II.5 provides a summary of various operate at 18% of their capacity. Other reimbursing farmers affected by climate- examples of initiatives related to examples include structurally lower related events. implementations of ICTs in agriculture to temperatures in fruit production areas of deal with adaptation to climate change the North of the country or a record early Agroclima.cl network in Chile (CC): cold and freezing vague in February 2011. The Agricultural Development Foundation The national network of state agro-climate (FDF) is private non-profit technological stations in Mexico, which was launched institution created in 1992 by producers initially in 2000 with 10 stations, currently and exporters of fresh fruit. The initiative encompasses 825 stations and benefits was launched with the objective of from overall investment of MXP 80 million. overcoming technical limitations in a The network’s objective is to provide participatory manner. Among its current information to agriculture producers responsibilities, it runs and manages the fine-tuned to the needs and virtual online network Agroclima. FDF characteristics of local conditions. Each began its activities in 1997 with 12

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 57 Table II.5 : Implementing ICTs in Agriculture to Adapt to Climate Change (CC) Key Success Factors

Addressing drivers of Building response Managing climate risk Confronting climate Key success factors are dialogue in the vulnerability capacity change framework of a long-term partnership --Zoneamento agrícola --Agroclima” --Agricultura/riego de --Sistema de alertas between public and private actors to de risco climático” --Description: Networks precisión” tempranas identify relevant data to be measured, Centroamérica” --Description: Public of agro-climate stations --Description: Tests, identified and disseminated. The local, loans and private training, promotion, --Description: Network --Countries: Chile and regional and territorial dimensions are key insurance to farmers Mexico (other countries technological that integrates data based on climate risk possibly have similar development and from multiple sources factors and must bring in specific implementations zoning developed by a initiatives) funding of PA/PI tools on disaster (floods, agricultural sector representatives and pool of agricultural --Countries: Argentina droughts, hurricanes, research institutions --Institutions: INIA, earthquakes and local authorities together with national Dirección and Chile --Country: Brazil volcanoes) assessment telecommunications authorities and Meteorológica, --Institutions: INTA, and warning in Central --Institutions: Embrapa, farmers’ organizations Fundación CIDETER America countries private companies. A sound and flexible Brazilian Ministry of and private companies (Argentina); INIA, Agriculture, several (Chile); Fundación CORFO (Chile) --Institutions: UN-WFP, institutional design enabling the universities, public Produce, agricultural US institutions (NASA), coordination of the different actors within --Advantages: Local University College banks, private research institutes development/ a long-term framework has proved key to insurance companies (Mexico) London, national focal adaptation of foreign points the development of the network and --Advantages: --Advantages: Open PA/PI technologies, Incorporates climate data generation, feed development of --Advantages: ensured the following: risk variables to other CC projects and clusters of national Supranational network investment decisions can also support private producers of --Drawbacks: PPP not -- Human resources and capacity and to public loan farmers’ decision- these technologies. balanced, strongly building policies in agriculture, making. --Drawbacks: PPP not public. with an additional --Drawbacks: PPP not balanced, strongly -- Economic and financial sustainability impact on mitigation clear/innovative in the public. strategies Mexican case -- Quality, accuracy and relevance of --Drawbacks: PPP not (Fundación Produce is clear/innovative. Private financed by the Federal information and data insurance companies state and farmer’s use risk indicators but associations, but they -- Timely dissemination not sure they are not stakeholders participate in its Reproducibility in other countries development process. --Other possible case --Other possible case --Other possible case --Other possible case As mentioned in the present case, such studies: studies: “Modelación studies: AQUACROP studies: “Ayuda a experience is replicable in all countries of “Infraestructura de de los impactos del – FAO (Worldwide) América Latina y el datos espaciales” cambio climático en la Caribe para la gestión the region. (CIREN, Minagri, agricultura” (Embrapa de los riesgos de CONAF, FIA – Chile) – Brazil) desastres naturales” Keywords/tags: Agriculture, ICT, climate --“Red Interinstitucional (BID) change de Cambio Climático y Seguridad Alimentaria - RICCLISA” (MDAR, DNP, Cenicafé, References Universidades, others – Colombia) Chavarría, Hugo (2012), “Las TIC en las --“Todo Chile --“Platicar: Plataforma de --“SoftwareTriguero, instituciones públicas para la agricultura Conectado” Tecnología, Soyero y Maicero” en América Latina: los casos de Costa Información y --Description: Rural --Description: Software Rica, el Paraguay y el Uruguay”, Project Internet network Comunicación to support decision- Agropecuaria y Rural” Documents, No. 500 (LC/W.500), --Country: Chile making in the --Description: Virtual fertilization of crops, Santiago, Chile, ECLAC [online] www. --Institutions: Subtel platform for the based on soil and (MTT), Entel interchange of water availability eclac.cl/publicaciones/xml/2/48362/ --Advantages: Since the knowledge and information LasTICenInstitucionesPublicas.pdf. project considers the technological transfer --Country: Argentina connectivity of most among farmers

Small-scale implementations Small-scale Nagel, José (2012), “Principales barreras --Institutions: AACREA, rural areas, it will allow --Country: Costa Rica para la adopción de las TIC en agricultura farmers even in remote Profertil SA, locations to have --Institutions: INTA, Universidad de B. Aires y en las áreas rurales” Project Documents, access to the climate Fundecooperación --Advantages: Free No. 501 (LC/W.501), Santiago, Chile, information services (Costa Rica), FAO, software developed by (that are not available South-South a non-profit ECLAC [online] www.eclac.cl/ on cell phones) and cooperation organization of publicaciones/xml/7/48377/ other services to --Advantages: It allows agricultural producers PrincipalesBarrerasParaAdopcionTIC.pdf support their farmers to exchange together with decision-making. knowledge on technicians from a Rodrigues, Mônica and Adrian Rodríguez --Drawbacks: It is a more adaptation strategies public university and a traditional PPP in that work for them. private agrochemical (2013), “Information and Communication infrastructure company. Technologies for Agricultural Development investment, the in Latin America, Trends, barriers and innovativeness comes from the inclusion of policies” (LC/R.2187), Santiago, Chile, rural areas and the ECLAC [online] www.eclac.cl/ recognition of the impact it would have on publicaciones/xml/9/49319/2013-50_ national development. R2187-Agricultura_WEB.pdf.

Source: ECLAC. Framework based on International Institute for Sustainable Development (2011), “The Strategic Application of Information and Communication Technologies to Climate Change Adaptation in Africa”.

58 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Project Juntos is now being replicated in Innovative model of PPP three cities in Brazil and has the goal of Case 14. The strategic model of Project Juntos PPP expand to a total of 10 municipalities (Figure II.6) is designed to allow philan- within three years. Innovation in thropic investors to finance the develop- Public Services ment of innovative and strategic pro- Description grammes concerning local governments in Brazil (“Project that would not otherwise be carried out. Despite Brazil’s bumpy but positive Comunitas, as coordinator and proponent Juntos”) economic growth over recent years, of the project, firstly chooses a municipality surpassing the United Kingdom for a brief (i.e. mayor) willing to be a partner and work moment as the seventh largest economy together with the private sector and the in the world, Brazil stills ranks as the 17th technical partners selected to implement Geographical scope: Municipalities in most unequal country, according to the four strategic actions, as described below. Brazil GINI Index. This level of social (1) Fiscal efficiency discrepancies is evident in comparisons Thematic area: Healthcare, education, between the two cities taken as examples The initial focus of Project Juntos is e-Government, design thinking, fiscal here. The city of Curitiba has a Human providing fiscal gains for the municipality, efficiency Development Index (HDI) score of 0.823 by increasing revenues (without raising – better than Portugal – while Ingazeira in taxes) and reducing expenditure (without Executive Summary Pernambuco has an HDI of 0.608, a decreasing social entitlements). This similar level to Namibia. Just like Ingazeira, process is carried out by a specialized “Progress is only possible through Brazil has another 1,608 municipalities management consultancy firm, Falconi, in cooperation. Project Juntos is an example ranking below this African country in an 18-month project, which generates, on of this: how coordinated actions between terms of social development. average, significant increases in the city’s investment. A steering committee made the private and public sectors can bring Three principal reasons for this situation lie innovative solutions focused on citizens.” up of the mayor himself and his senior in a lack of investment capacity by personnel meets weekly to oversee and – Fernando Henrique Cardoso, Former municipalities, often owing to bad engage with the fiscal programme. President of Brazil and partner of Project management; the scarcity of public staff Juntos technical expertise to implement (2) Strategic planning innovative, or merely efficient public In parallel to the fiscal efficiency pro- Juntos Project is the largest coalition of services; and a lack of public leaders with Brazil’s most prominent business leaders gramme, Project Juntos also conducts a true commitment to results, strategic planning sessions with the mayor focused on innovating and improving local transparency and social change. government and public service and his key personnel. This process management. It represents an innovative Project Juntos focuses on having a real establishes governance practices, key PPP model that brings together impact in those structural and human success metrics and priorities for public philanthropic capital, technical expertise development problems. services in education and healthcare, and public leadership to develop new which will be implemented with the services in areas such as education and increased investment capacity, generated healthcare, designed and co-created for by the Fiscal Efficiency programme. and together with citizens.

The project, led by Comunitas, a non- Figure II.6 : The Strategic Model of PPP partisan civil society organization, focused its work on the municipal level, with the main objectives: to increase fiscal Business Funding Comunitas Coordination funding of Technical Partners efficiency and the investment level of the Leaders (Civil Society) city, design and co-create new public Strategic Actions services, in a collaborative effort with citizens and build leadership and managerial capacity among the senior Technical Fiscal Strategic Public Service Human staff of the municipality. Partners Efficiency Planning Innovation Development In its first project, with the city council of Campinas (a city of 1 million inhabitants), the undertaking succeeded in increasing the municipal investment budget by 182% (from R$ 77 million to R$ 217 million Healthcare annually), without tax increases or a Policies reduction in social entitlements. It has also Local Government led a public service co-creation process Education between the municipal staff and citizens, Policies through design thinking workshops and Source: Comunitas. an Open-Innovation Web platform.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 59 (3) Public service innovation Comunitas, finally, conducts screening Fourth phase: Implementation – Public and due diligence processes in order to service innovation The next strategic action focuses on identify a local political leader, i.e. a mayor, mobilizing and engaging citizens and the The fourth phase runs in parallel with the who meets a set of pre-defined criteria municipal public staff to design and third and breaks down into four different complete ethical profile, a commitment to co-create innovative public services, steps, according to Tellus’ design thinking action and results, openness to based on preliminary diagnostics and the and open innovation methodology. Firstly, transparency and innovation and has strategic planning done with the Tellus runs a diagnostic in order to assess recently been elected on a first mandate consultancy firm. Also, Project Juntos the quality of public services and the (which allows possible project continuity). utilizes Open Innovation Web platforms to feasibility of, and potential for, enables thousands of citizens to generate improvements in both education and Strategy for implementation ideas and proposals on how to enhance healthcare. Next, during the deep dive public services. This strategic action is Comunitas, as proponent and coordinator moment, Tellus engages – by means of implemented by Tellus, an organization of Project Juntos, establishes a schedule design thinking workshops and an open that specializes in Design Thinking and with five clear phases, for each chosen innovation platform – public agents, Open Innovation for public services. city to implement the project. citizens and other relevant stakeholders to collaborate and co-create possible (4) Human development First phase: Establishing an initial support solutions to those areas. The third step network Finally, the fourth strategic action of the involves prototyping those solutions and project involves developing human Comunitas has being working on various then implementing in it full scale. Finally, capital, i.e. the leadership and managerial different collaborative projects in recent the whole innovation process is skills of the senior public officials. The years, which has helped the organization systematized by Tellus so other renowned not-for-profit organization build a strong support network of Brazilian municipalities can replicate it easily. Centro de Liderança Pública (CLP) is the business leaders. With the initial support Fifth phase: Replicating to other partner appointed to conduct a series of of this network, Comunitas was able to municipalities workshops and practical courses to foster secure 100% of Project Juntos funding, a managerial culture, focused on results without the need to rely on governmental The experience drawn from Comunitas and leadership. sources. over the first project implemented in the city of Campinas in January 2013, the The first city to start implementing the Second phase: Selecting the right mayor strong role-model effect and the initial project was the city of Campinas, in Brazil, Comunitas then draws up a political map results generated within six months of the which became a partner in January 2013. of municipalities in Brazil and their kick-off have been sufficient arguments to In May and August 2013, two new cities respective elected mayors, cross- inspire other mayors, local business started replicating the project model, with checking multiple sources of information figures and philanthropists to replicate the the support of local investors and in order to screen and compile a list of innovative PPP model of Project Juntos. In philanthropists. political leaders that fit the four fact, in September 2013, two new cities aforementioned main criteria. From this besides Campinas began implementing Stakeholders involved and shortlist, Comunitas must identify for its the project. organizational structure network at least one local and one Financing scheme Project Juntos is proposed and strategic supporter each willing to commit coordinated by Comunitas, a not-for-profit at least 25% of the financing of the project The financing of the project was wholly civil society organization created in 1995 for that municipality. This financing (100%) drawn from private investors, with with the purpose of contributing to Brazil’s decision finally determines which mayor philanthropic capital, which ensures social development by strengthening and city is chosen to start implementing flexibility in hiring the technical partners collaboration across different sectors. the project. This process takes from four and avoids political and partisan to six months. influences that could undermine Comunitas is responsible firstly for Comunitas’ credibility as an impartial leveraging the resources necessary to Third phase: Implementation – Fiscal partner. fund the project, which comes from the efficiency and strategic planning widest possible network of collaboration The total average budget needed for The initial phase of implementation, between Brazilian business leaders: implementation of the entire PPP project conducted by Falconi, is focused on CEOs, family business members and their is R$ 2 million, or US$ 800 million, per working together with the mayor and respective foundations. This network of year for each city. The financing scheme senior staff, through a weekly steering supporters provides philanthropic capital is divided among three different committee meeting that aims to identify to fund Comunitas contracts with Project categories of partners: Comunitas opportunities to increase municipal Juntos technical partners – Falconi, Tellus provides 50% of the financing, which revenues and decrease expenditure. and CLP – three of the most prominent comes from its own support network; a Ensuring results in the short-term helps consultancies in Brazil specializing in strategic sponsor, one of the members of gain the confidence of the mayor and implementing the strategic actions Comunitas support network, provides cement his commitment to the project. described above with the municipality and 25% of the resources; the local support Together with the strategic planning, this its citizens. network, a number of entrepreneurs and phase lasts for 18 months, and initial fiscal philanthropists that reside in the chosen optimizations and results are seen within city, provides the remaining 25% of the six months of kick-off. financing.

60 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Results, Outcomes and Key Success Factors Reproducibility in other countries Impact of the iPPP As stated above, the Project Juntos model is The key success factor of the project is already being replicated throughout other From a fiscal efficiency standpoint, Project the exceptional collaborative network cities in Brazil. It is also possible to imagine the Juntos has delivered initial results with the established by Comunitas, which brings project’s replication in other countries. It is city of Campinas. Six months into the together many of the community’s most important to consider success and project, the best estimates see a 182% prominent chief executives, family sustainability factors to reproduce the project increase in the city’s investment capacity, business members and younger in other countries. Naturally, it is fundamental soaring from R$ 77 million in 2012 to R$ generation leaders. This support network to build strong support network, identify the 217 million in 2013, as shown in Figure II.7. provides not only the flexible finance right technical political partners and political scheme necessary to fund the initiative, leaders and ensure a high level of transparency In respect of innovation in public services, but also significant soft power which has with all stakeholders. the project has so far been able to engage boosted the level of commitment of local dozens of municipal collaborators and mayors. citizens, leading to 85 inspiring cases of Policy Recommendations innovative public services, 63 project Another success factor is the assessment of hundreds of mayor profiles to ensure proposals, and the city’s Open Innovation Below are summarized recommendations to that a candidate with the political will to platform (www.campinasevoce.org.br) the project’s main stakeholders. has welcomed 14,805 visitors in its the implement the project was chosen, along first month (September 2013). As the with some of the best technical services For corporate foundations/philanthropic diagnostics identified Campinas main providers in the country, in the form of institutions: Consider channelling philanthropic priority as healthcare, the ideas generated Tellus, CLP and Falconi. investments to solutions that can be highly ranged from improvements in the design scalable and sustainable, partnering with the of public health centres, to technology Sustainability factors government in a transparent manner. solutions to make the system more The first factor to be considered is the For governments: Improve and innovate public effective and new ways to train and municipality’s own economic services using design thinking and fiscal motivate healthcare staff. sustainability. This is by the initial focus on efficiency tools, which can reduce expenses, In terms of project replication, two other generating fiscal efficiency, which creates increase revenues and improve the quality of cities (Pelotas in Rio Grande do Sul and additional budget that can be invested in services. more innovative and better quality public Paraty in Rio de Janeiro) were chosen by For businesses: Engaging in PPP projects can services. Fiscal equilibrium is a strategic supporters and began help change a city in which the company in fundamental pillar to be sustained, to implementing the project in September question might have workers or operations, allow increased investment capacity to 2013. Comunitas has received an ever thus producing a win-win situation and improve and innovate social and human increasing amount of funding for the increasing its influence and brand awareness. projects and requests keep coming from development areas, such as education mayors and local supporters alike to start and healthcare. Another sustainability Keywords/tags: Public service innovation, implementing Project Juntos in other pillar of the project is the high level of design thinking, open innovation, education, cities. Its replication roadmap expects to transparency agreed with the mayors, healthcare, fiscal efficiency, public-private see 10 cities implementation the project in which assures legitimacy with the multiple partnership the next three years and the development stakeholders of the project. of on-line educational and training tools to expand the project’s impact to an even References larger number of municipalities. Giambiagi, F and A.C. Além (2008), “Finanças Públicas no Brasil: Teoria e Prática”, 3rd edition, Ed. Elsevier, São Paulo. Figure II.7 : Fiscal Improvements Generated by Project Juntos João Paulo dos Reis Velloso (Org.), 2003 City Investment Level “Governo Lula: Novas prioridades e 250 desenvolvimento sustentado”. Ed. José Olympio, Rio de Janeiro.

R$ million 200 140 Related websites / online material:

150 See [online] http://data.worldbank.org See [online] www.pnud.org.br/atlas/ranking/ 100 Ranking-IDHM-Municipios-2010.aspx See [online] www.comunitas.org.br 50 See [online] www.tellus.org.br See [online] www.clp.org.br 0 2009 2010 2011 2012 Fiscal 2013 See [online] www.falconi.com Improvements

Source: Comunitas, Falconi. See [online] www.campinasevoce.org.br

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 61 Description The reason for this difference is that Case 15. broadband operates with very high The Internet has revolutionized the returns to scale once certain access and Regional economy and society and will continue to use thresholds have been reached. The do so at an ever-faster pace. The cross- potential of this technology is thus only Broadband cutting use of this technology, in particular fully realized when it is accessed and broadband and its applications, has an used intensively by most of the population Dialogue impact on economic growth, labour and by a majority of firms, public agencies productivity, employment and quality of and civil society organizations. life. The digital paradigm is driving a new Broadband penetration is low in the industrial revolution, which is in turn Geographical scope: Latin America region primarily because of factors bringing structural changes to production associated with the income level of Thematic area: Telecommunications, patterns. According to a recently different segments of the population. The regulation, broadband, connectivity conducted study by McKinsey, 75.4% of lack of broadband in far-flung rural areas the value derived from the Internet goes to is another challenge. Figure II.8 shows the non-Internet sectors of the economy and disparity in broadband penetration by Executive Summary society. Advanced manufacturing, income quintile, illustrating that the supply-chain tracking, and the so-called poorest segments of the population are The Regional Broadband Dialogue is a “Internet of things” have allowed for also the least likely to enjoy the benefits of forum for discussing and sharing efficiencies that historically could only broadband use. experiences to formulate public policies have be dreamt about. and concrete initiatives aimed at lowering According to some experts, in general no the cost and improving the quality of The widespread availability and adoption more than 2% of income should be spent broadband in Latin America, to make the of broadband, based on an interaction on a broadband service for it to be economic and social benefits of this between various complementary assets considered accessible. The estimated service available on a mass scale. (skills, devices, digital applications and cost of a 1 Mbp-speed fixed broadband infrastructure networks) create a dynamic connection in the region represents on The Dialogue includes a forum for that has a strongly positive effect on average almost 6% of income as a public-private debate. The members of economic growth and social inclusion. proportion of monthly per capita GDP, this forum are representatives of 11 Studies in developed countries estimate based on data from the Regional governments in the region, the main that a 10% increase in broadband Broadband Observatory (ORBA) of telecommunications firms, academic penetration can boost GDP by up to ECLAC. experts and international organizations 2.5%, although the impact may be only working in this field. 0.16% in Latin American countries.

Figure II.8 : Households with Internet Access by Income Quintile, Data to 2011 (Percentages)

90

80

70

60

50

40

30

20

10

0 VEN VEN VEN VEN VEN PER PER PER PER PER CHL CHL CHL CHL CHL PRY PRY PRY PRY PRY COL COL COL COL COL ECU ECU ECU ECU ECU URY URY URY URY URY BRA BRA BRA BRA BRA ARG ARG ARG ARG ARG

Q1 Q2 Q3 Q4 Q5

Source: Economic Commission for Latin America (ECLAC), on the basis of household surveys.

62 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America In the context of the Regional Broadband This initiative has been supported in Chile The main telecommunications firms in the Dialogue, studies have been conducted to by “Fundación País Digital”, a non-profit region have participated in Dialogue identify the cost determinants in the region foundation grouping private network events, such as Telefónica, Telmex, and assess how the related costs can be operators and telecom companies with CISCO, AKAMAI, Google, Yahoo reduced. One relevant factor is the region’s the aim of coordinating efforts by the Research, Huawei and Ericsson, in high dependence on international Internet public and private sectors with a view to addition to various institutions linked to the traffic and limited direct connectivity with developing a common national digital sector such as AHCIET, REGULATEL, other regions. An estimated 85% of Internet agenda. It brings together the private ICT ISOC, LACNIC, ICANN and EuroIX. traffic passes through the United States, industry and governments and regulators which drives up the final price of the service to design and implement public policies by around 20% to 40%. Estimates indicate by national ministries, and regional and Results, Outcomes and that an average reduction of 10% in the local governments, with the purpose of Impact price of a broadband service would result in broadening access to digital connectivity a rise of almost 19% in the penetration rate. and scaling up the use of ICTs. Its areas of In view of the goal set by the Dialogue, the action are: smart cities; education and main result was the formulation of policies Reducing the region’s dependence on digital development; incentives for the and proposals for reducing the international traffic would thus result in development and use of ICTs in dependence on international traffic. At the lower costs and higher levels of production processes. Its initiatives range national level, proposals and policies were broadband penetration. from the development of technical geared towards determining the dialogue roundtables between public and conditions for attracting content hosting, private actors to the design and by, for example, establishing content implementation of specific projects. distribution networks (CDN) through Opportunities Related to companies such as Google which are Cloud Computing responsible for a very significant proportion of the traffic that is accessed from the region. In addition, as an The mass development of broadband, Innovative PPP model together with progress in virtual data and outcome of the discussions and studies, information storage may pave the way for The goal is to cut the cost of broadband in public policy recommendations have a new information technology (IT) supply the region by reducing dependence on been formulated for the development of model: cloud computing. This new international Internet traffic. Internet exchange points (IXPs), which some countries, such as Bolivia, had paradigm appears particularly relevant Characteristics of the PPP, with emphasis already incorporated into legislation. and attractive in terms of cost efficiency, on its innovative features: The Regional given its ability to combine savings with Broadband Dialogue is a forum for At the regional level, options for improving greater flexibility in the management of the cooperation and public-private debate connectivity between countries were IT requirements of companies and that focuses on very concrete and specific analysed and the Dialogue is working with governments. Cloud computing enables themes on which action can be taken in the South American Infrastructure and reducing entry barriers and therefore the short term. Meetings of the Dialogue Planning Council (COSIPLAN) of the provides easier market access for new take place in two settings: an open forum Union of South American Nations players. As such, it will generate innova- in which governments, firms, academics (UNASUR) to support the establishment tion and creation opportunities for new and other organizations in the sector of a fibre-optic ring to link up the countries players and new business models and participate, and a closed forum, in which of South America. In addition, in the modify the landscape for all economic representatives of the telecommunications framework of the Dialogue, meetings have sectors requiring IT services, which may sector of the governments of the region been held between government in turn become powerful tools for reduc- discuss the policies to be adopted and representatives of the countries of the ing access gaps. Like any paradigm decide on the priorities. Only in a region and representatives of the changer, cloud computing also poses multistakeholder environment can the European Commission to discuss the challenges in terms of its implementation technical and technological options be possibility of laying a new undersea cable in ICT environments that are used to fully understood. to connect Europe directly with South having “everything under control”. America. Currently, issues related to data mobility, Stakeholders involved and organizational privacy and security limit the expansion of structure: ECLAC is the technical Broadband tariffs have fallen significantly cloud computing services and must be secretariat of the Regional Broadband since the Dialogue was set up. For a fixed analysed thoroughly by public and private Dialogue and is responsible for broadband connection with a download actors. In this context, ECLAC and the conducting studies and organizing the speed of 1 Mbp, the tariff measured as a European Commission have launched a Dialogue’s meetings and events. Eleven proportion of average per capita income public-private dialogue initiative aimed at governments in the region are fell by an average of 64% in a nine-country seeking solutions to these issues that are represented in the Dialogue – Argentina, sample during the period December 2010 of concern for the industry, governments Bolivia, Brazil, Chile, Costa Rica, to May 2013. The sharpest drop was seen and users. This initiative will enable the Colombia, Ecuador, Mexico, Paraguay, in Ecuador, where tariffs fell by 84%. formulation of proposals for common Peru and Uruguay – and the International visions and actions between business Telecommunication Union. and governments from Latin America and the European Union in order to accelerate the adoption of cloud computing and favour sectors with limited access to the benefits derived from new technologies.

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 63 Another important result was the generation of information that was transparent and comparable at the regional level on the impact of international traffic on broadband costs and quality and tariff trends. In this regard, the Regional Broadband Observatory (ORBA) was set up, which is responsible for generating and analysing that information.

Key Success Factors The success factors identified included clearly defined goals, assigning roles to the participants, the stability of funding sources and the continuity of the process.

Policy Recommendations -- The problem and the objectives should be clearly defined. -- The tasks to be carried out by each person should be clearly identified from the beginning. -- If a PPP is possible, it should be institutionalized and the process formalized. -- The source of financing must be sustainable. Keywords/tags: Broadband, telecommunications, social inclusion

References De León, Omar (2012), “Desarrollo de la conectividad nacional y regional en América Latina”, Project Documents, No. 502 (LC/W.502), Santiago, Chile, ECLAC. ECLAC (Economic Commission for Latin America and the Caribbean) (2013), The Digital Economy for Structural Change and Equality (LC/L.3602), Santiago, Chile. ECLAC (2012), “Estado de la banda ancha en América Latina y el Caribe, 2012. Informe del Observatorio Regional de Banda Ancha (ORBA)”, Project Documents, No. 505 (LC/W.505), Santiago, Chile, ECLAC. Jordán, Valeria, Hernán Galperin and Wilson Peres (eds.) (2013), Broadband in Latin America: Beyond Connectivity (LC/G.2583-P), Santiago, Chile, ECLAC.

64 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Creating New Models : Innovative Public-Private Partnerships forfor InclusiveInclusive DevelopmentDevelopment in Latin America 65 A. Key Success Part III Factors

The different cases of innovative PPPs discussed in this report reveal that there are common features that should be considered in any public-private partnership, regardless of the area of social, productive or sustainable development on which it focuses. In the first place, the PPP should be well accepted by both the private and public sectors and any other civil society actors that may be involved, thus ensuring that a positive agenda is set with a view to establishing a win-win situation for all parties. In other words, it is essential to take account of the interests of the social group targeted and the capacity of the government at different levels, and to identify the appropriate economic incentives for the private sector when drawing up and implementing innovative PPPs. To establish a lasting relationship across the private and public sectors, it is crucial to understand the expectations that the parties have of the programme, to identify the specific expectations each of them has in terms of value creation to clarify and reach a consensus on each party’s responsibilities in implementing the project. Identifying the right stakeholders to be involved in the partnership, according to the expected outcomes, is essential to successful implementation. This must be done meticulously to determine the appropriate institutional setting, incentives and level of action, and to ensure legitimacy with the target population. The parties involved should reach a common understanding on the long-term vision of the programme to ensure common ground is found at the policy formulation stage. This avoids misunderstandings among the parties during the policy implementation phase and may ensure greater sustainability. Through a process of consensus building, governments, the private sector and civil society should set a balanced, positive agenda in which the parties involved should be aware of their individual responsibility towards the programme. A positive joint agenda can be created by a participatory platform in which a group of leading figures from civil society, the private sector and governments can discuss their different points of view concerning the issue to be addressed and

66 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America the policy to be implemented, bringing reducing the burden on any single actor. fresh ideas to the table that reflect their When possible, the establishment of B. Policy Rec- unique voices and perspectives. It is financing mechanisms or frameworks important to be aware of and capitalize on ensuring medium- to long-term ommendations any synergies between the parties commitment and continuity of work involved and seek the development of a should be considered to avoid long-term relationship of trust. Structuring dependency on political cycles, among PPPs, particularly in the social and other objectives. As mentioned in this report, the different environmental spheres, requires levels of the state should retain a key role Furthermore, programmes focused on overcoming prejudices and establishing a in supervising, providing incentives, the social domain must be adaptable, culture of dialogue to set common goals. maintaining regulatory frameworks and given the dynamic nature of the field. The It is also important to take stock of the ensuring the provision of quality goods actors involved must be willing to accept a comparative advantages and roles of and services. The state must also be certain level of operational flexibility and to each actor involved in the partnership and involved in identifying new opportunities make accommodations or concessions identify the most relevant skills that they and governance mechanisms to deliver to ensure the effectiveness of the initiative. can bring to the partnership. In the same these goods and services jointly with the Adaptability and flexibility are particularly vein, a common understanding needs to private sector, seeking higher levels of important in overcoming bureaucracy and be reached of whether actions are most outcome, impact and sustainability. possible obstacles during the appropriate at the local, regional, national, implementation of social policies. Indeed, In the first place, government agencies at transnational or global level. Given the PPP initiatives have shown the the national, regional and local levels can cultural heterogeneity of the actors importance of the role played by play a vital role by stepping up monitoring involved, it is critical to spend time framing governments in the creation of new and evaluation of existing innovative the policy and its implementation phase to institutional frameworks to address social, practices to assess their scalability and establish a clear picture of the balance of productive or environmental issues, whether they can be replicated elsewhere power, the responsibilities of each party expanding the outreach of programmes through policies, programmes and and potential conflict zones. with less bureaucracy by integrating them public-private partnerships. Further efforts In short, a key factor for success in a PPP into long-term national plans or strategies. should therefore be made to standardize is how to address the cultural The creation of specific institutional oversight and field evaluation practices heterogeneity of actors from different mechanisms to ensure the articulation of and to widely disseminate their results organizational backgrounds. Therefore, it the different public and private among government and business actors, is essential to not only focus on the goals stakeholders over time is essential in this particularly from the local to the national and structure of the policy, but also foster regard. Reliance on or creation of a levels. Multilateral organizations, the reciprocal understanding among the specific institutional setting – picking the academic sector, local communities and actors. Other relevant factors to be pivotal and most legitimate actors – can civil society actors are powerful partners assessed when identifying specific actors significantly facilitate the channelling and to support evaluation and dissemination to be involved include leadership capacity sustainability of resources, regular exercises. and influence, governance, legitimacy, convening of the different stakeholders Public authorities should also aim to prestige, functions, skills and abilities, and and provision of progressive training and generate greater incentives and create the availability of resources, both human capacity building activities. favourable climates for actors from and financial. Finally, the implementation of results- business, communities and civil society to Although partnerships among these based tools, cost-effectiveness analysis, share ideas regarding potential actors are not obvious and imply evaluation mechanisms and constant partnerships and new forms of policy- overcoming organizational and cultural monitoring are also essential to ensure the making and programme creation in the shortcomings, they can ultimately provide continuous improvement of PPP projects social, productive and sustainable a qualitative leap in terms of process and in Latin America. PPP projects bring development spheres. Such efforts can in contributing to social and sustainable together multiple parties with diverse be provided through traditional incentives development. The setting up of a interests, and different evaluation tools are such as tax exemptions, as in the case of collaborative network structured across therefore needed to monitor their ProUni mentioned in this report. There is governments at different levels, private progress. The implementation of a also much scope for encouraging sector, civil society, community, non-profit bottom-up – rather than a top-down – innovative financial mechanisms, such as organizations and academic institutions strategy is essential to obtaining feedback social impact bonds which could have will not only multiply sources of funding from the target populations and to making significant potential for development in the but also extend the outreach of programmes more transparent and their region. Multilateral development programmes, reaching vulnerable or actors more accountable. PPP initiatives, institutions can also act as a catalyst, not marginalized populations that otherwise by and large, place emphasis on a only providing financing, but also helping would not have access to the participatory approach involving the to create an appropriate environment for programmes. affected population, local municipalities these different actors to share their views and private firms to carry out the and knowledge and translate the To ensure the financial sustainability of the programmes. Some initiatives adopt a relationship into need partnerships. partnership, governments, the private decentralized and participatory process sector and any other actors involved for the design, organization and should determine the funding sources at implementation of programmes, thereby the inception of the programme. The putting the target population at the centre participation of multiple actors enables of the process. co-funding partnerships to be created,

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 67 As further incentives, public-private reciprocal understanding of the ways of spaces bringing together a combination C. Conclusions thinking and working of the different of actors and skills are increasingly being actors involved. Each actor embodies a created to foster the exchange of ideas on specific mental model, internal paradigm innovative approaches, the generation of and system of values and, what is more, a integrated visions and trust. Innovation vision of the world. Various existing laboratories – geared to both social and Bridging Cultural Gaps to models may facilitate this process by production sectors – providing convening helping make an accurate diagnosis and opportunities and equipped co-working Optimize iPPPs cultural mapping of groups and spaces as well as training and capacity Building public-private partnerships individuals, such as those proposed by building activities are interesting platforms among government, business and civil cultural anthropologist Jean Gebser in this respect and help to generate small society is no easy task, as it requires (Schuschny, 2007), the dynamic spiral ecosystems that may foster public-private overcoming prejudices and fostering a model of the humanist psychologist Claire 55 partnerships. In the same vein, social culture of dialogue and consensus- Graves (2005) and the integrated innovation contests and crowdsourcing building that necessitates identifying a set approach of Ken Wilber (2001). These platforms are being promoted to enable of common goals. It also implies defining models or conceptual maps propose an public authorities and the private sector to the respective comparative advantages integrated approach to psychological, identify potentially scalable projects from and roles of each actor working together sociological and cultural perspectives in civil society, communities and youth instead of separately. Traditionally, there the framework of value systems or visions organizations. These approaches could has been a natural divide in areas of of the world. They can also help identify be further encouraged. action and world view, but these visions and prevent possible bottlenecks or cultural inadaptabilities among actors. A fourth area of potential development is have evolved as all actors have for governments to establish, in progressively moved closer to Therefore, the effectiveness of the design consultation with the private sector and understanding the need for a new and formulation of a PPP requires prior civil society actors, regulatory dialogues state-market-society equation to address cultural diagnosis. Interaction among the and institutional frameworks that deepen development issues. actors involved may even be facilitated by common understanding of specific Developing a partnership requires not specialists who take into careful development issues, define shared values only dialogue and consensus-seeking consideration assertive knowledge and and provide clear schemes for relying on among actors involved in solving a methodologies to enable actors to other actors in the implementation of development problem, but also participate in a manner that maximizes specific policies and programmes with a establishing a dynamic process that their potential. long-term vision. In the social sphere, and involves a broad set of factors: political It has been shown that Latin America is health services the quality of education will, political structure, institutional among the most innovative regions in the really can rise in a solid, well-regulated framework, balance of power among world in terms of social development framework through new forms of public- actors, the quality of leadership involved, practices and, to a lesser extent, private partnerships. In the area of new and the related visions and need for sustainable development. The region’s technologies and the information society, urgency that sustain the partnership an longstanding shortcomings in the public regional dialogue on broadband is a ensure it is successful, balanced and provision of quality goods and services in powerful tool for keeping governments up sustainable. The preparation process the social sphere have given rise to an to date with technological developments must carefully take into account these innovative and entrepreneurial mindset and adapting their regulatory frameworks factors through a strategic analysis of the among its societies, particularly from accordingly, without losing sight of their actors involved in the PPP, have a clear actors at the community and local levels. commitment to providing quality public picture of the balance of power, respective This should provide an incentive for goods and services. Long-term agendas and of possible conflict zones, governments, business and civil societies partnerships are required for the analyse key resources, define the to seek new sources of value creation implementation of programmes using the methods of supervision and allocation of geared to societal, human and social most appropriate skills of each actor. resources and clearly determine the development in a rights-based approach accountability of the different actors in the to create an enabling environment for the partnership. Other relevant factors to be generation of more innovative public- duly assessed when identifying the actors private partnerships. to be involved are capacity to influence, governance, legitimacy, prestige, functions, skills and abilities and the availability of resources, both human and financial. Lastly, an underlying but key aspect to take into account in a PPP is the cultural complexity of setting up a partnership between different actors with different organizational backgrounds. When designing a PPP, it is therefore essential to place emphasis not only on the objective and content of the issues to be addressed by the partnership but also to foster

68 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 69 The preparation of this report was supervised by Enrique García Rodríguez, President and Chief Executive Officer of Acknow- the Development Bank of Latin America (CAF), and Alicia Bárcena Ibarra, Executive Secretary of ECLAC, United Nations, respectively Chair and Vice-Chair ledgements of the Global Agenda Council on Latin America of the World Economic Forum, jointly with Marisol Argueta de Barillas, Senior Director, Head of Latin America, World Economic Forum, and Fernando J. Gómez, Associate Director, Latin America, World Economic Forum.. The report was coordinated, compiled and edited by Alicia Bárcena Ibarra, Executive Secretary of ECLAC, United Nations, and Romain Zivy, Economic Affairs Officer in the Office of the Executive Secretary at ECLAC. It was prepared collectively with the members of the Global Agenda Council on Latin America.

70 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Authors of the Case Case 12. Inclusion of Carbon Footprint Lourdes Casanova, Senior Lecturer in Measurement in Export Development Management, Samuel C. Johnson Studies Strategies: Alicia Frohmann, Ximena Graduate School of Management, Cornell Case 1. University for All (ProUni): Lourdes Olmos and Romain Zivy, ECLAC University S. Casanova, Senior Lecturer in Case 13. Enhancing the Production and Marcelo Cortês Neri, Minister of Strategic Management, Samuel C. Johnson Dissemination of Weather-related Affairs of Brazil Graduate School of Management, and Indicators to Adapt Agricultural Akio Hosono, Director, JICA Research Barbara Marchiori de Assis, Master of Production to Climate Change by Means Institute, Japan International Cooperation Public Administration Candidate 2014, of ICT: Adrián Rodríguez, Mônica Agency Cornell Institute for Public Affairs, Cornell Rodrigues and Romain Zivy, ECLAC University Kellie Meiman Hock, Managing Partner, Case 14. Innovation in Public Services in McLarty Associates Case 2. Concession Schools in Brazil (“Project Juntos”): Antonio Ermirio Colombia: Cecilia María Velez White, de Moraes Neto, Co-Founder, Vox Capital Susan L. Segal, President and Chief President, Jorge Tadeo Lozano University, Executive Officer, Council of the Americas Colombia Case 15. Regional Broadband Dialogue: Mario Castillo, Chief, Innovation and New Antonio Ermirío Moraes Nieto, Co- Case 3. Empresarios por la Educación Technologies Unit, Division of Production, Founder, Vox Capital (ExE): Susan L. Segal, President and Productivity and Management of ECLAC, Cecilia María Velez White, President, Chief Executive Officer, Council of the and Edwin Fernando Rojas, Coordinator, Fundación Universidad de Bogotá Jorge Americas Regional Observatory on Broadband Tadeo Lozano Case 4. Partnerships for Progress and (ORBA) of the Division of Production, Inclusion, Strengthening Technical and Productivity and Management ECLAC Humberto Luis Ribeiro, Secretary of Commerce and Services, Ministry of Vocational Education in Colombia: The report benefited from the valuable Development, Industry and Foreign Trade Olympia Icochea, Senior Executive/ inputs and comments from Olga Lucia of Brazil Vice-Presidency of Social Development, Acosta, Vianka Aliaga, María Elisa Bernal, Latin American Development Bank (CAF) Caridad Canales, Ana Ferigra Stefanovic, José Juan Ruiz Gómez, Chief Economist Case 5. Promotion of Productive Andrés Fernández, Sebastián Herreros, and General Manager, Research Development through the Inclusion of Martin Hilbert, James Ireland, Juan Pablo Department Inter-American Development Women in Quality Employment in Central Jiménez, Valeria Jordán, Rodrigo Bank Martínez, Marco Ortega, Wilson Perés, America: Sonia Montaño, Chief, and Ana María del Rocío Ruiz Chávez, Andres Schuschny, Sally Shaw, Guillermo Ferigra Stefanovic, Division for Gender Undersecretary for Competitiveness and Sunkel, Cecilia Vera, Pamela Villalobos (all Affairs, ECLAC Business Regulation, Secretariat of the of ECLAC), Andrés Rugeles (Development Economy of Mexico Case 6. Global University Engagement: Bank of Latin America – CAF), Marcus Thomas O’Toole and Alvaro Salas-Castro, Fuchs, Carlos March, Guillermo Scallan, Alejandro Poma, Managing Director, Cornell Institute for Public Affairs (CIPA), Nias Vadhat (Fundación Avina), Margareth Grupo Poma Cornell University Flores (Red eAmerica), Juan Luis Nuñez Fernando Zavala, President, SABMiller, (Fundación País Digital) and Laura Case 7. Digital Health Project of the Peru Federation of Internal Medicine (FEMI): Lattanzi (SOCIALAB). Alvaro Vero, Director, and Ana Barbiel, The document was edited by the ECLAC Research Analyst Coordinator, Digital Health Project of the Publications and Web Services Division. Federation of Internal Medicine (FEMI), Lisa Ventura, Associate, Global Agenda Uruguay Councils, World Economic Forum Members of the Global Case 8. Affordable Earthquake-resistent Council Manager Housing: Akio Hosono, JICA (Japan Agenda Council on Latin International Cooperation Agency) America Fernando J. Gómez, Associate Director, Research Institute Latin America, World Economic Forum

Case 9. Agroforestry in the Amazon Chair Forum Lead Rainforest: Akio Hosono, JICA (Japan Enrique García Rodríguez, President and Marisol Argueta de Barillas, Senior International Cooperation Agency) Chief Executive Officer of the Research Institute Director, Head of Latin America, World Development Bank of Latin America (CAF) Economic Forum. Case 10. The Olmos Project: Jaime Rodríguez, Principal Executive/Vice- Vice-Chair Presidency of Social Development, and Alicia Bárcena Ibarra, Executive Secretary, Carlos Narvaez, Principal Executive/ Economic Commission for Latin America Department of Structured Finance, Latin and the Caribbean (ECLAC), United American Development Bank (CAF) Nations Case 11. Multistakeholder Partnerships Salvador Biguria, Head of New for the Conservation of the Amazon Businesses, Pantaleon Sugar Holdings Biome: Juliana Strobel, Gestora Regional, and Cecilia Barja, Estrategia para el Bioma Amazónico, Fundación AVINA

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 71 1. Methodology Appendices and Case Selection Criteria

Necessary Conditions Authenticity -- Does the initiative involve both private (or philanthropic) and public capital? -- Can the benefit in either economic, social and/or sustainable development or human capital be clearly identified? Impact -- Does the initiative have tangible impact in its target area? Robustness -- Is the value of the initiative recognized by a broad range of stakeholders? Sustainability -- Can the environmental, social and economic sustainability of the initiative be verified? Transparency -- Is the execution of the initiative a transparent and open process?

Differentiating Criteria Innovation -- Is this a model known in a conventional, known area but applied in a different field? -- Does it involve a novel partnership element (financing, actors, timeframe, deliverables, quality) that is new to an established area? -- Has it required the establishment of new sets of performance dimensions (quality criteria) which maximize value delivered? Impact -- Does the initiative have tangible impact in additional areas beyond the main target? Diversity -- Are non-conventional stakeholders participating, beyond the parties normally engaged in projects with similar objectives? Transferability -- Is the model portable so that it can be transferred to other countries? Reach -- Is the initiative a response to major inequality risks in the region?

72 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America Akio Hosono Edwin Fernando Rojas 2. Authors JICA Research Institute, Japan International Coordinator, Regional Observatory on Broadband Cooperation Agency (ORBA) and Affiliations E-mail: [email protected] Division of Production, Productivity and Management, ECLAC Jaime Rodríguez E-mail: [email protected] Principal Executive/Vice-President of Social Development Alicia Bárcena Development Bank of Latin America (CAF) Executive Secretary E-mail: [email protected] ECLAC, United Nations E-mail: [email protected] Carlos Narvaez Principal Executive/Department of Structured Finance Romain Zivy Development Bank of Latin America (CAF) Economic Affairs Officer E-mail: [email protected] Office of the Executive Secretary ECLAC, United Nations Cecilia Barja E-mail: [email protected] Fundación AVINA E-mail: [email protected] Lourdes S. Casanova Senior Lecturer of Management Juliana Strobel Samuel C. Johnson Graduate School of Management Fundación AVINA Cornell University E-mail: [email protected] Member of the Global Agenda Council on Latin America of the World Economic Forum Alicia Frohmann E-mail: [email protected] Division of International Trade and Integration ECLAC, United Nations Barbara Marchiori de Assis E-mail: [email protected] Master of Public Administration Candidate 2014 Cornell Institute for Public Affairs Ximena Olmos Cornell University Division of International Trade and Integration E-mail: [email protected] ECLAC, United Nations E-mail: [email protected] Susan L. Segal President and Chief Executive Officer Mario Castillo Council of the Americas, USA Chief, Innovation and New Technologies Unit Member of the Global Agenda Council on Latin America Division of Production, Productivity and Management of the World Economic Forum ECLAC, United Nations E-mail: [email protected] E-mail: [email protected]

Thomas O’Toole Edwin Fernando Rojas Cornell Institute for Public Affairs (CIPA), Cornell University Coordinator, Regional Observatory on Broadband (ORBA) E-mail: [email protected]; Division of Production, Productivity and Management Alvaro Salas-Castro ECLAC, United Nations E-mail: [email protected] Cornell Institute for Public Affairs (CIPA), Cornell University E-mail: [email protected] Adrian Rodríguez Chief, Agricultural Development Unit Olympia Icochea Division of Production, Productivity and Management Senior Executive/Vice-Presidency of Social ECLAC, United Nations Development E-mail: [email protected] Latin American Development Bank (CAF) E-mail: [email protected] Mônica Rodrigues Economic Affairs Officer Sonia Montaño Division of Production, Productivity and Management Chief, Division for Gender Affairs, ECLAC ECLAC, United Nations E-mail: [email protected] E-mail: [email protected]

Alvaro Vero Antonio Ermirio de Moraes Neto Director, Project BID/FOMIN FEMI Salud Digital Co-Founder Federación Médica del Interior (FEMI), Uruguay Vox Capital E-mail: [email protected] E-mail: [email protected]

Ana Barbiel Mario Castillo Coordinator, Project BID/FOMIN FEMI Salud Digital Chief, Innovation and New Technologies Unit, Federación Médica del Interior (FEMI), Uruguay Division of Production, Productivity and Management, E-mail: [email protected] ECLAC E-mail: [email protected]

Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America 73 28. There are concerns that ProUni could perhaps help entrench 46. This is a non-governmental organization made up of public social bias by channelling academically qualified students and private stakeholders involved in electronic health. For Endnotes from low-income families towards less prestigious private further information, see [online] http://www.sueiidiss.org. tertiary education universities, rather than finding ways to democratize access to the most renowned public universities 47. For more information, see [online] http://www.eclac.cl/ in Brazil by means of affirmative action. Additionally, most socinfo/noticias/paginas/3/44733/newsletter12.pdf. private tertiary institutions are located in the wealthiest regions 48. of the country (the south, south-east, and central-west). As a See [online] http://sos.ucv.ve/ and http://www.eclac.cl/ 1. See the World Economic Forum’s reports on strategic consequence, while the wealthiest regions have publicaciones/xml/7/49897/SOSTelemedicinaVenezuela.pdf. infrastructure. approximately one private institution per 9,000 people 49. This note was prepared by Akio Hosono, JICA (Japan between 18 and 24 years of age, the north and north-east International Cooperation Agency) Research Institute. The 2. See “Breeding Latin American Tigers” ECLAC/World Bank, have less than one private tertiary institution per 16,000 2010, and ECLAC, 2008. author would like to thank the JICA Brazil Office for its people between 18 and 24 years of age, according to valuable comments on an earlier version of this note. Any information obtained in the INEP further education survey of errors or omissions are the responsibility of the author. 3. See Mariana Mazzucato, The Entrepreneurial State, 2013. 2011. Nonetheless, it is noteworthy that in 2012, Brazil passed Law No 12,711/2012, regulated by Decree 7,824/2012, which 4. Over time, ODA flows to Latin America and the Caribbean 50. One major reason that illegal logging is difficult to stop is states that 50% of students accepted in federal universities because rain forests are both vast and hard to access and have declined significantly, as a share of overall ODA flows, as must be from public high schools. Fifty percent of these a percentage of regional GDP, and as a share of total financial patrol. However, Brazil’s National Institute for Spatial students must be from families whose per capita income is up Research, the Brazilian Institute of Environment and flows. The region’s share of global ODA flows has fallen from a to 1.5 minimum wages. The deadline for compliance with this peak of 10% in 1996 to 5.6% in 2011 (latest available data). Renewable Natural Resources (IBAMA), the Japan Aerospace requirement is set for 30 August 2016. ProUni is one of several Exploration Agency (JAXA) and JICA have together achieved The share fluctuated between 12% and 15% during most of programmes launched by the federal government to facilitate the 1960s. a breakthrough in patrolling using satellite monitoring. the access of low-income students to tertiary education. Although the Brazilian satellite monitoring system was very 5. At the global level, the amount from private donors amounts 29. advanced, since Brazil used optical sensors, observation was According to information obtained from the citizens hindered by the heavy clouds often present during the rainy to nearly US$ 60 billion per year, equivalent to almost half the information system of the Ministry of Education, on 22 July net ODA disbursed in one year by DAC donor countries. season, when most illegal logging took place. Since then, the 2013 in response to a personal request by the author on 29 observation system has been dramatically improved with the April 2013. 6. The Latin American and Caribbean region is home to use of Pulsar radar mounted on an advanced land-observing one-third of the world’s freshwater reserves and 12% of its 30. Exchange rate of 21 November 2013 (US$ 1.00 = R$ 2.3067). satellite (ALOS) of JAXA, a system that is not affected by arable land, one-third of world production of ethanol, around See [online] http://www4.bcb.gov.br/pec/conversao/ clouds and that operates 24 hours a day regardless of the 25% of the production of biofuels and 13% of oil production. conversao.asp. Accessed on 21 November 2013. weather. JAXA began providing satellite images to the Global mineral reserves in the region include: 65% of lithium, Brazilian institute in 2007. The institute relays this information 49% of silver, 44% of copper, 33% of tin, 32% of 31. IBOPE. “Sumário Analítico – Pesquisa de Opinão Pública sobre to the federal police and to the Chico Mendes Institute for molybdenum, 26% of bauxite, 23% of nickel, 22% of iron and o Programa ProUni e Assuntos Relacionados à Educação.” The Biodiversity Conservation, both of which are involved in 22% of zinc. The region also accounts for 48% of world study was obtained from the citizen information system of the monitoring and managing the Amazon. Thanks to improved output of soybean and 21% of the global area of natural forest, Ministry of Education (on 31 May 2013) in response to a real-time data, Amazon deforestation has been decreasing, and has an exceedingly rich biodiversity. personal request by the author on 29 April 2013. reaching its lowest ever point from 2009 to 2011. See Hosono, A. (2013). As for sharing Brazil’s experiences and innovative 7. Such a vision is outlined in ECLAC’s call for a new equation 32. TCU. “Relatório de Auditorial Operacional – Programa solutions, based on Pulsar radar on the ALOS, with other between state-market-society to bridge the traditional and Universidade para Todos (ProUni) e Fundo de Financiamento countries that face similar challenges through SSC/TrC, see structural gaps that still hamper the region’s development. ao Estudante do Ensino Superior (FIES),” 2009. See [online] Aida, Y. and C. Kobayashi (2012). See: Time for Equality. Closing gaps, opening trails (2010). http://portal2.tcu.gov.br/portal/page/portal/TCU/ comunidades/programas_governo/areas_atuacao/ 51. This and the following paragraphs are based on information 8. “Strategic Infrastructure Steps to Prepare and Accelerate educacao/Relat%C3%B3rio%20de%20auditoria_Prouni. provided by JICA-Net (http://jica-net.jica.go.jp/ Public-Private Partnerships” (2013), World Economic Forum. pdf/. Accessed on 21 September 2013. lib2/07PRDM008, 2008). 9. “Breeding Latin American Tigers” (2008), ECLAC and World 33. TCU. “Acórdão 637/2012.” See [online] http://portal2.tcu.gov. 52. Embrapa Eastern Amazon and JICA have implemented Bank and ECLAC (2010). br/portal/page/portal/TCU/comunidades/programas_ research cooperation projects on agroforestry. governo/areas_atuacao/educacao/RELATORIO_PROUNI. 10. See The Entrepreneurial State. Debunking Private vs Private 53. pdf. Accessed on 21 September 2013. Web Page, JICA Brazil office 20120207. Sector Myths (2013), Mariana Mazzucato. 54. 34. IBPT. “Carga Tributária Brasileira em 2012” (2013). See [online] See [online] http://www.fps.org.mx. 11. C. K. Prahalad (2011), The Fortune at the Bottom of the Pyramid. http://www.contribuinte.org.br/img/uploads/novelty/ 55. See the examples of Movistar Innova in Santiago, Chile, Ruta 12. Eggers and MacMillan (2013). estudo/559/CargaTributaria2012IBPT.pdf. Accessed on 21 N in Medellin, Colombia, and CIADE in Jalisco, Mexico. September 2013. 13. For instance, every year from 2004 to 2009, the Kellogg Foundation and ECLAC organized a “social innovation contest” 35. MEC. “Processo de supervisão encerra 1.766 bolsas e in Latin America and the Caribbean, which identified and desvincula instituições” (2009). See [online] http://portal.mec. analysed 4,800 initiatives contributing to achieving the MDGs at gov.br/index.php?Itemid=86&catid=212&id=14681:proces the local and community levels (http://www.cepal.org/dds/ so-de-supervisao-encerra-1766-bolsas-e-desvincula- Innovacionsocial/). Ashoka has also implemented its instituicoes&option=com_content&view=article. Accessed on “changemakers” programme (http://www.changemakers.com). 21 September 2013.

14. See [online] http://www.redeamerica.org and http://www. 36. TCU. “Acórdão 637/2012.” See [online] http://portal2.tcu.gov. redeamerica.org/PremioLatinoamericano. br/portal/page/portal/TCU/comunidades/programas_ governo/areas_atuacao/educacao/RELATORIO_PROUNI. 15. See [online] http://www.fundacaolemann.org.br. pdf. Accessed on 21 September 2013.

16. See [online] http://www.unglobalcompact.org and http:// 37. Exchange rate as of 21 November 2013 (1 US$ = R$ 2.3067). www.unglobalcompact.org/docs/news_events/8.1/GC_ See [online] http://www4.bcb.gov.br/pec/conversao/ brochure_FINAL.pdf. conversao.asp. Accessed on 21 November 2013.

17. See [online] http://sustainabledevelopment.un.org/content/ 38. TCU. “Relatório de Auditorial Operacional – Programa documents/833glob_dev_rep_2013.pdf. Universidade para Todos (ProUni) e Fundo de Financiamento ao Estudante do Ensino Superior (FIES),” 2009. See [online] 18. See [online] http://www.cepal.org/rio20/noticias/ http://portal2.tcu.gov.br/portal/page/portal/TCU/ paginas/6/48936/2013-123-Sustainable_development_WEB. comunidades/programas_governo/areas_atuacao/ pdf. educacao/Relat%C3%B3rio%20de%20auditoria_Prouni. pdf/. Accessed on 21 November 2013. 19. See [online] http://www.effectivecooperation.org. 39. Exchange rate as of 21 November 2013 (1 US$ = R$ 2.3067). 20. See [online] http://www.povertyactionlab.org. See [online] http://www4.bcb.gov.br/pec/conversao/ conversao.asp. Accessed on 21 November 2013. 21. More information is available in the INEP report “Resumo Técnico do Censo da Educação Superior 2011”, see [online] 40. TCU. “Acórdão 637/2012.” See [online] http://portal2.tcu.gov. http://download.inep.gov.br/educacao_superior/censo_ br/portal/page/portal/TCU/comunidades/programas_ superior/resumo_tecnico/resumo_tecnico_censo_ governo/areas_atuacao/educacao/RELATORIO_PROUNI. educacao_superior_2011.pdf. pdf. Accessed on 21 September 2013.

22. In 2009, the monthly average income per capita of the 41. Compensation funds are tax-funded institutions financed by north-east was almost half (R$ 396.00 = US$ 171.67) of the worker payroll contributions to provide welfare services to its monthly average income per capita of the south-east of Brazil affiliates (chosen by companies). They have developed (R$ 759.00 = US$ 329.04). See [online] http://www. high-quality schools for their affiliates and have become todospelaeducacao.org.br/. Exchange rate of 21 November enthusiastic participants in the project, as a form of social 2013. See [online] http://www4.bcb.gov.br/pec/conversao/ responsibility. conversao.asp. Accessed on 21 November 2013. 42. Barrera, Felipe, “The Impact of Private Provision of Public 23. The PNE is currently pending in Congress (Substitute to the Education: Empirical Evidence from Bogotá’s Concession Bill 8,035/2010). Schools”. World Bank Policy Research Working Paper 44121, February, 2006. 24. See [online] http://www.globalinnovationindex.org/content. aspx?page=gii-full-report-2013#pdfopener. 43. Bonilla-Angel, “The effects of Charter School on Academic achievement, Evidence for Colombia”, February, 2010. 25. Exchange rate of 21 November 2013 (US$ 1.00 = R$2.3067). See [online] http://www4.bcb.gov.br/pec/conversao/ 44. According to a new World Bank report on Latin America, the conversao.asp. Accessed on 21 November 2013. region will grow 3.5% in 2013, a slight increase from last year’s 3% growth, but significantly below the 5% annual growth 26. INEP. “Sobre o ENEM.” See [online] http://inep.gov.br/web/ rates of the past decade (de la Torre et al, 2013). enem/sobre-o-enem. Accessed on 9 September 2013. 45. Article 2 of this law states: “It is incumbent upon the Ministry 27. Bill initially proposed by the Executive branch to implement of Public Health to implement the National Integrated Health ProUni. See [online] http://www.abmes.org.br/abmes/public/ System, which will coordinate public and private arquivos/publicacoes/Cadernos13.pdf. Accessed on 21 comprehensive healthcare providers identified in article 265 September 2013. of law No. 17. 930 of 19 December 2005.”

74 Creating New Models : Innovative Public-Private Partnerships for Inclusive Development in Latin America

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